State attorneys general plan to sue to stop T-Mobile-Sprint merger

A T Mobile and Sprint store sit side-by-side in a strip mall

A T Mobile and Sprint store sit side-by-side in a strip mall

Overall, "t$3 he proposed commitments that Sprint and T-Mobile made to the FCC do not ameliorate the harms to competition, and the resulting harms to consumers, that will result if the merger is completed", the state AGs' lawsuit said. A spokeswoman for the New York State Attorney General also declined to comment.

State attorneys general in 10 states filed a lawsuit on Tuesday to block a proposed $26 billion merger of Sprint and T-Mobile, a deal that would combine two of the four largest wireless carriers in the U.S.

In addition to NY and California, the states attorneys general of Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia, and Wisconsin have joined the lawsuit. Consumer advocates and Democratic lawmakers worry about price increases and job cuts.

"They see the FCC accepting certain remedies and concessions that don't, in their minds, solve the problem", she said.

More recently, in the Bayer-Monsanto agribusiness merger, five states a year ago criticized the federal government's approval. That itself "was a very unusual move", said Diana Moss, the president of the American Antitrust Institute and an advocate for tougher antitrust enforcement.

While T-Mobile and Sprint have made promises that their merger would offer lightning-fast speeds and increased capacity, the Attorneys General investigation found that numerous claimed benefits were unverifiable and could only be delivered years into the future, if ever.

Besides the price guarantee, the companies are promising to build out 5G services, offer wireless home Internet service, and to divest the Sprint-owned Boost Mobile.

The suit is a major blow for the merger, according to Blair Levin, an analyst with New Street Research. The in a politically sensitive race with China to be on top as this technology is developed and implemented.

The two companies have been in regular contact with regulators as they lobby for approval.

T-Mobile now has more than 79 million subscribers and is a majority-owned subsidiary of Deutsche Telekom AG. And if the deal closes, T-Mobile and Sprint have promised the FCC that it will sell off Sprint's Boost Mobile pre-paid unit. The other two Republican commissioners indicated they would join him.

But public-interest advocates said these conditions did not address the deal's main criticisms - higher prices in the long run and less wireless competition- and would be hard for regulators to enforce. Consumer advocacy groups have voiced their disagreement with the deal. It's unclear how Justice Department antitrust chief Makan Delrahim will decide, but the antitrust division staff has reportedly recommended that the merger be blocked.

"Direct competition between Sprint and T-Mobile has led to lower prices, higher quality service, and more features for consumers", they wrote in their complaint.

In fact the lawsuit quotes the majority shareholder of T-Mobile US, Germany's Deutsche Telekom, as saying in a document that reducing the number of large mobile operators in the United States would result in a "more '********; market by reducing competition and enabling it to earn a greater return on its investment".

Before filing suit, the states gave significant consideration to T-Mobile and Sprint's claims of increased coverage in rural areas. So with T-Mobile (TMUS) now trading at $75.35, Sprint's stock (S) should be closer to $7.73 than the current $6.58 if investors were 100% confident that the deal is going to go through.

Latest News