T-Mobile-Sprint Merger Faces Possible Lawsuit by States

There are several states’ attorney generals who are investigating T-Mobile’s plan to acquire Sprint Corp. on antitrust grounds believing the merger would be bad for consumers in their states.  Their plans are to block the deal by filing a lawsuit against it even if the Justice Department and the Federal Communication Commission (FCC) approves of it.

Attorney generals fro the states of New York and California, both Democrats are assisting in leading a group of over a dozen states that are studying the effect the merger would have on competition as well as the affect it will have on consumers.

Two attorney generals from Utah and New Mexico however, believe it will benefit consumers in their states, especially in the rural areas.

This issue comes on the heels of the preparation by companies like Verizon and AT&T who are in the process of building their 5G network across the US. States who are opposing the $26.5 billion T-Mobile/Sprint merger feel the combination will result in their having too much control as statistics show that the combination of these two companies would give them around 30 percent control of the wireless service but that in certain areas it could be significantly more which would not be good for consumers who could be affected by higher prices in their states nor would it be good for competition.

Earlier this month at a meeting for the country’s state attorney generals, the attorney general from Maryland, Brian Frosh said that the proposed merger of T-Mobile and Sprint would be dangerous for consumers.

States do have the power to go to court to block the merger should the Justice Department and the FCC approve the deal and this would result in a major hurdle for T-Mobile and Sprint if they do.

Showing how serious the states are who are opposing the merger, they have hired economists to assist them in their review which includes professor Carl Shapiro from the University of California at Berkeley. Shapiro had assisted the Justice Department’s case to block the AT&T merger withTime Warner with little success when the judge ruled that the two companies could merge.

T-Mobile and Sprint’s desire to merge is based on the belief that they could build the 5G, a fast, advanced next-generation of wireless service, more quickly together. Their joint venture is also in response to President Trump’s admonition to wireless companies to get the 5G technology up and running as soon as possible.

Trump said in February that US companies will get left behind on a global level if they don’t step up their efforts.