Attorneys General File Lawsuit to Block T-Mobile/Sprint Merger

June 13, 2019 by Elin Johnson
Attorneys General File Lawsuit to Block T-Mobile/Sprint Merger

WASHINGTON – The Attorneys General from ten states including New York and California filed a lawsuit this week to stop the proposed merger between telecommunications companies T-Mobile and Sprint.

In a federal complaint filed in New York on Tuesday, the attorneys general allege any merger between two of the four largest mobile service providers in the nation would drive up the cost of cellphone services and deny consumers of competition in the market.

T-Mobile and Sprint had hoped to have their merger approved by July. Now those approvals will likely be significantly delayed.

“When it comes to corporate power, bigger isn’t always better,” said New York Attorney General Letitia James, whose office is taking the lead in the litigation.

“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,” she said.

James went on to call the proposed hookup between the two mobile service providers “the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”

California Attorney General Xavier Becerra added that while T-Mobile and Sprint are promising faster, better, and cheaper service for their customers with this merger, “the evidence weighs against it.”

In addition to New York and California, the other states that have joined the lawsuit are Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia, and Wisconsin. All of the attorneys general involved are Democrats.

The two companies have been the subject of merger rumor since at least 2014, when Sprint floated a reported $20 billion bid to buy T-Mobile. That bid went nowhere, but talks resumed briefly last year, ending last November without a deal. Then in April, The Wall Street Journal reported that the two companies were once again back at the negotiating table.

Both companies have since framed discussions of the deal around the notion that it will pave the way for the U.S. to expand its 5G network.

They’ve said their goals were to bring high-speed internet access to rural areas, and to invest in 5G technology.

But the attorneys general contend T-Mobile has yet to produce any plans to put new cell towers in rural areas not already served by either company.

The attorneys general also argue this deal would cost customers of T-Mobile and Sprint around $4.5 billion each year.

The average cost of mobile services has fallen over the last decade by about 28 percent, according to the U.S. Labor Department. The consumption of mobile data has risen rapidly. On average, a typical U.S. household spends $1,100 on cell phone services each year.

The big four service providers are Verizon, AT&T, T-Mobile and Sprint, with T-Mobile and Sprint taking up the third and fourth spot, respectively. T-Mobile has 79 million subscribers while Sprint has 54 million.

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