T-Mobile Sprint Merger

Big business is driving the bus, and it has a firm grip on the wheel.

The third and fourth largest wireless carriers in the nation, T-Mobile and Sprint, are closing in on their deal to combine companies after a winning lawsuit decision in their favor.

This past Tuesday, U.S. District Court Judge Victor Marrero denied a lawsuit, spearheaded by the District of Columbia and 9 other states, against the proposed T-mobile-Sprint merger.  The states argued that the planned union was anti-competitive and would have consumers dishing out extra cash for higher wireless services.

New York’s attorney general Letitia James led the charge, filing the suit in New York federal court.  James stated frankly, “There is no doubt that reducing the mobile market from four to three will be bad for consumers, bad for workers, and bad for innovation, which is why the states stepped up and led this lawsuit.”

Judge Marrero disagreed with the suit, convinced that the merger “is not reasonably likely to substantially lessen competition” and went on to compliment T-Mobile as “a maverick that has spurred the two largest players in its industry to make numerous pro-consumer changes.”  Recent years have also shown Sprint on a slow decline, “falling farther and farther short of the targets it must hit to remain relevant.” Marrero concluded.

T-Mobile has given their word that should the merger go through, they will not raise prices for the next three years, as noted by the Federal Communications Commission upon approval of the deal in 2019.  

There has been a considerable amount of apprehension however concerning the validity of these statements, among them a former FCC commissioner Gigi Sohn who is all but convinced. 

“Over and over again, consumers are promised enormous benefits and so-called ‘efficiencies’ by merging parties…but what they are left with each time are corporate behemoths who can raise prices at will, use their gatekeeper power to destroy competition and new voices, and hijack regulatory and legislative processes.”  Gigi goes on to support her conviction that “we are already seeing this with the AT&T-Time Warner merger, where promises not to discriminate against rivals or raise prices were broken within months of being approved by a trial judge.”

The 26 billion dollar merger will assume the name T-Mobile, making it the third largest wireless carrier in the nation behind powerhouse conglomerates Verizon Wireless and AT&T .  

All of the subscribers on a Sprint’s subscriber plans will be transferred over to T-Mobile plans, excluding customers from any of Sprint’s prepaid brands, which will be transferred over to Dish Network

Yes, the famous broadcast-satellite provider has plans to move into the telecommunications business.  Part of the merger agreement was for Sprint and T-Mobile was to help establish Dish Network as a wireless provider and new competitor by reaching a $5 billion dollar settlement, in which T-Mobile and Sprint would sell off significant portions of the company to Dish Network after the merger.  This was a particularly keen approach by the converging companies in order to garner support from the FCC and thus incentivise approval from the Justice Department. 

Needless to say, the wheels on this bus continue to go round and round.  Big business and its lobbying efforts are a continuing force to be reckoned with in the United States, while antitrust efforts are left with little or no signal, speaking through the static, “Can you hear me now?”

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© The Law Offices of John Rosenbaum