T-Mobile, Sprint Merger Challenged by Ten States
Executives at T-Mobile and Sprint have pitched the merger of their companies as a way for the country to greatly expand its 5G network, a priority for President Trump, who has argued that the widespread adoption of the technology is crucial to national security. The $26 billion deal seemed to be moving forward in recent weeks, when the head of the Federal Communications Commission gave it his blessing. But on Tuesday, the plan hit a roadblock when a group of state attorneys general sued to block it.
The 10 officials who filed suit, all of them Democrats, said on Tuesday that if the merger went through, the prices consumers paid for phone plans would rise as the number of major wireless carriers dropped to three from four. T-Mobile, the nation’s third-largest wireless company, and Sprint, the No. 4 carrier, have insisted they must get bigger to serve their customers better.
A merger would reshape the telecommunications industry in the United States and create a formidable rival to the industry leaders, AT&T and Verizon, with each of the three serving roughly a third of the market.
“When it comes to corporate power, bigger is not always better,” New York Attorney General Letitia James said at a news conference. “To many upstate New Yorkers, (the carriers) still struggle with 3G,” she said, adding that there is nothing in the merger that will guarantee more towers and coverage for certain communities.
James said the lawsuit was not filed to influence the Justice Department’s decision on the merger, adding that negotiations were ongoing among the states, the Justice Department and the carriers. James also said her office did not notify Justice before the states filed the lawsuit, adding it was not required for them to do so. State attorneys general often participate in lawsuits aimed at stopping mergers but rarely go it alone.
The complaint was filed in the U.S. District Court for the Southern District of New York.
“This is the third time T-Mobile has tried to merge and shrink the market to three players,” said California Attorney General Xavier Becerra.