Expressing their staunch opposition to the proposed merger between T-Mobile and Sprint, a team of Senate Democrats have written to the Department of Justice’s Antitrust Division and the Federal Communications Commission, urging them to reject the proposal.
T-Mobile and Sprint are in the midst of obtaining regulatory approvals needed for the former company’s $26.5 billion acquisition of the latter, a plan announced in April 2018. Collectively, the companies directly employ more than 80,000 people and serve more than 130 million customers.
On Feb. 13, members of the House Energy and Commerce Committee held a hearing to parse the deal, its competition concerns, and effect on consumers and service availability.
Separate from that hearing, the letters crafted by Democrats letters to Assistant Attorney General Makan Delrahim and FCC Chairman Ajit Pai argue that the merger is “likely to raise prices for consumers, harm workers, stifle competition, exacerbate the digital divide, and undermine innovation.”
In the letter to Delrahim, the senators urged the DOJ to seek an injunction to block the merger.
“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,” it says. “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.”
“Our enforcement officials are the last line of defense preventing reconsolidation of our telecommunications markets at the expense of American consumers,” both letters added. “We urge you to act to prevent this dangerous merger from proceeding.”
The letters were authored by Sen. Richard Blumenthal (D-Conn.) and co-signed by Sens. Amy Klobuchar (D-Minn.), Tom Udall (D-N.M.), Sherrod Brown (D-Ohio), Kirsten Gillibrand (D-N.Y.), Elizabeth Warren (D-MA), Bernie Sanders (I-Vt.), Cory Booker (D-N.J.), and Edward J. Markey (D-Mass.).
The documents elaborate on concerns “that a T-Mobile-Sprint merger would increase market consolidation.”
“The merger would result in just three competitors—down from four—covering the wireless market,” the senators claim. “This would be a sharp blow to competition in the telecommunications industry.” They argued that, post-merger, “three remaining members of this exclusive club will have every incentive to shut the door on new members, happily divide the market, and collect ever-rising monthly rents from wireless subscribers with few real alternatives.”
In their letter, the senators also called into question claims that the merger is needed to build out 5G networks.
“T-Mobile’s and Sprint’s sudden claims that neither can create a competitive 5G network separately flies in the face of announcements, disclosures, and marketing to consumers and investors over the past two years,” the letters say. “Not only do each of these companies have their own path forward to achieving 5G coverage, but the financial details of this deal and the technical challenges of building a 5G network suggest that the New T-Mobile is unlikely to meaningfully speed up the deployment of nationwide 5G.”
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