The opposition to the T-Mobile-Sprint merger grew today as several U.S. Senators sent letters to the FCC and Department of Justice to oppose the deal.
A group of U.S. Senators led by Richard Blumenthal (D-CT) today announced that they’ve signed letters to both the FCC and DoJ to explain their opposition to the proposed merger of T-Mobile and Sprint. The group includes Amy Klobuchar (D-MN), Tom Udall (D-NM), Sherrod Brown (D-OH), Kirsten Gillibrand (D-NY), Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Cory Booker (D-NJ), and Edward J. Markey (D-MA).
In the letters, the senators lay out their arguments against the merger, including claims that the merger will lead to “dangerously high levels of market concentration” and that it will “likely cause Americans’ monthly bills to jump dramatically.” The senators argue that while T-Mobile and Sprint say that the combined carrier will continue to act as an Un-carrier and be incentivized to fill up its capacity by keeping prices low, T-Mo is more likely to be disruptive if the merger is blocked and today’s competitive market pressures continue.
The senators also argue that the merger is “bad for workers”, citing a Communications Workers of America estimate that the deal will result in up to 30,000 lost jobs. They’re also concerned that low-income consumers will be hurt by the deal, as the new T-Mobile would control approximately 43 percent of the prepaid market, which could lead to prices increasing by at least 10 percent. “Because low-income consumers disproportionately rely on the prepaid wireless market, these communities will suffer the most, despite being the very communities that our antitrust laws should most vigorously protect,” the Senators say.
The letter goes on to say that both T-Mobile and Sprint maintain standalone paths to nationwide 5G, despite the carriers saying that the new T-Mobile is “the ONLY company with the capacity to quickly create a broad and deep nationwide 5G network”. The senators say that T-Mo and Sprint are disparaging their own standalone network features and that this is a “common tactic.” “When AT&T attempted to acquire T-Mobile in 2011, the latter was portrayed as a failing firm with “no clear path” to LTE. Today, by some accounts, T-Mobile boasts better LTE coverage than AT&T – a testament to the decision to reject that acquisition,” they say.
Finally, the senators say that the merger offers little for rural consumers and that it could have a negative impact on rural access. “Neither Sprint nor T-Mobile as standalone companies have demonstrated a strong track record of catering to rural America,” the letter reads, with the Rural Broadband Association claiming that T-Mobile has neglected to use the spectrum it has in rural areas and that its statements offer few new commitments that that would change if the merger is approved. Meanwhile, the Rural Wireless Association says that Sprint is the only U.S. carrier to offer “anything approximating commerically reasonable roaming rates, terms, and conditions to rural carriers” and that the new T-Mobile is unlikely to provide mutually-beneficial roaming agreements with regional carriers because it has little incentive to do so.
““For more than 30 years, our enforcers have understood that fostering robust competition in telecommunications markets is the best way to provide every American with access to high-quality, cutting-edge communications at a reasonable price. This merger will turn the clock back, returning Americans to the dark days of heavily consolidated markets and less competition, with all of the resulting harms,” the senators say. “Our enforcement officials are the last line of defense preventing reconsolidation of our telecommunications markets at the expense of American consumers. We urge you to act to prevent this dangerous merger from proceeding.”
Just last week, the T-Mobile-Sprint merger gained approval from the New York Public Service Commission. Now the deal is getting some new opposition in the form of a group of top senators, including some who have announced plans to run for president in 2020. And this isn’t the end of the high-profile T-Mobile-Sprint merger news for the week, as T-Mobile CEO John Legere and Sprint chairman Marcelo Claure are set to testify in front of the House Commucations & Technology Subcommittee on February 13 and the House Judiciary Committee on Antitrust on February 14.
Thanks, Ira!
Sources: Senator Blumenthal (1), (2)