A group of state attorneys general led by New York and California are filing a lawsuit to block T-Mobile’s $26.5 billion bid for Sprint, citing consumer harm.
The state AGs say the merger would hurt competition and drive up prices for cellphone service.
Participants in the suit also include Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia, and Wisconsin, according to the New York Attorney General’s office.
“When it comes to corporate power, bigger isn’t always better,” said New York Attorney General Letitia James. “The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country. That’s why we are going to court to stop this merger and protect our consumers, because this is exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”
A trade group, however, spoke out against the suit.
“It is disappointing but not surprising that a group of state Attorneys General are desperately trying to derail the proposed merger between Sprint and T-Mobile,” said Americans for Limited Government President Rick Manning.
“It is well documented that this merger will increase competition in the coming 5G markets, significantly expand high speed Internet access in a vast majority of rural America, provide a third national carrier to compete with AT&T and Verizon as well as create good paying American jobs. This merger will deliver important benefits to the constituents of each and every attorney general involved in the legal action. That is why the merger has the support of 18 of 19 state public utilities commissions, including New York, as well as FCC Chairman Ajit Pai,” he added.
“I hope regulators see for what it truly is, which is a delay tactic. If America is going to win the critical global race to 5G, then we cannot allow politicians who are out of step with the needs of their constituents to dictate national telecom policy.”
It’s an unusual step ahead of a decision by federal antitrust authorities. The Justice Department’s decision is pending. The Republican majority of the Federal Communications Commission supports the deal.
“The case puts pressure on Makan Delrahim, the head of the Justice Department’s antitrust division, reports Bloomberg news. “He can either side with the states, which say the merger should be blocked or negotiate a remedy that would allow the deal to proceed. Delrahim doesn’t think the settlement with the FCC goes far enough to resolve competition problems from the deal and is in talks with the companies about additional concessions.”
The companies say they need to bulk up to upgrade to a fast, powerful “5G” mobile network that competes with Verizon and AT&T. The companies are appealing to President Donald Trump’s desire for the U.S. to “win” a global 5G race. Consumer advocates and Democratic lawmakers worry about price increases and job cuts.
