A group of nine senators on Tuesday expressed their opposition to Sprint's impending merger with T-Mobile, arguing the deal is "likely to raise prices for consumers, harm workers, stifle competition, exacerbate the digital divide, and undermine innovation." The group conveyed their concerns in a pair of lengthy letters to the Justice Department and the Federal Communications Commission, urging the two agencies to block the deal.
The letter was signed by influential members of the Democratic caucus, including four senators who've announced they're running for the 2020 Democratic presidential nomination -- Amy Klobuchar of Minnesota, Kirsten Gillibrand of New York, Elizabeth Warren of Massachusetts and Cory Booker of New Jersey. The remaining five signatories are Sens. Richard Blumenthal of Connecticut, Tom Udall of New Mexico, Sherrod Brown of Ohio, Edward Markey of Massachusetts and Bernie Sanders of Vermont (an independent who caucuses with Democrats).
After years of stop-and-go negotiations, Sprint and T-Mobile in April 2018 finally announced an all-stock, merger and acquisition deal worth $26 billion. The deal would shrink the number of major wireless carriers in the US from four to three. Critics of the proposed merger have suggested the deal could leave consumers with fewer low-cost options, as well as fewer value-oriented Mobile Virtual Network Operators which lease network access from major mobile operators.
The senators wrote that as a result of the merger, the "three remaining members of this exclusive club will have every incentive to shut the door on new members, happily divide the market, and collect ever-rising monthly rents from wireless subscribers with few real alternatives."
Sprint and T-Mobile executives have claimed, among other things, that their combined company will be able to launch its 5G network faster than either company could separately or than its competitors AT&T and Verizon.
The senators expressed their skepticism of this claim as well.
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"T-Mobile's and Sprint's sudden claims that neither can create a competitive 5G network separately flies in the face of announcements, disclosures, and marketing to consumers and investors over the past two years," they wrote. "Not only do each of these companies have their own path forward to achieving 5G coverage, but the financial details of this deal and the technical challenges of building a 5G network suggest that the New T-Mobile is unlikely to meaningfully speed up the deployment of nationwide 5G."
The deal doesn't need congressional approval, but members of Congress can certainly exert strong influence over regulators at the FCC and DOJ. Another group of bipartisan lawmakers from the House recently sent a letter to the agencies in support of the deal.
Meanwhile, executives from T-Mobile and Sprint are gearing up to defend their deal in front of Congress this week. T-Mobile CEO John Legere and Sprint Executive Chairman Marcelo Claure are both slated to testify before a House panel on Wednesday. In written testimony submitted to the panel, Legere countered arguments against the merger and reiterated a commitment he made last week:
"New T-Mobile will make available the same or better rate plans as those offered by T-Mobile or Sprint for three years following the merger," he wrote. "Let me be clear: we are committed to making the same or better plans available at current or lower prices. We will not raise prices, and we are happy to put it in writing!"