Today, the United States Department of Justice (DOJ) approved the $26 billion merger of T-Mobile Inc. and Sprint Corporation. As part of the approval, T-Mobile and Sprint have agreed to sell assets to Dish Network including Sprint’s prepaid services, Boost Mobile and Virgin Mobile, and new spectrum licenses. Dish will also have the ability to operate on T-Mobile’s network for a seven-year period while it builds out its own network. The proposed merger is still pending approval by the full Federal Communications Commission. Fourteen state attorneys general have filed suit to block the transaction.
If approved, the number of national wireless carriers would be reduced from four to three, leading to less competition and higher prices for consumers. Low-income and marginalized communities who disproportionately rely on T-Mobile and Sprint for more affordable services may also find themselves displaced from wireless access.
Last year, Common Cause filed a petition to deny with the Federal Communications Commission formally opposing the merger. California Common Cause also testified against the merger at a public hearing held by the California Public Utilities Commission.
Statement of Michael Copps, Former FCC Commissioner and Common Cause Special Advisor
“Just a few months ago, reports indicated that the expert antitrust staff at the DOJ recommended the agency sue to block the T-Mobile-Sprint merger. But rather than take the reported advice of career staff, Assistant Attorney General Makan Delrahim decided to approve a blatantly anticompetitive deal by bringing in Dish as a sham fourth competitor. Basic math tells you that replacing Sprint, a national carrier with 50 million subscribers, with Dish, a satellite company with zero wireless subscribers, is a recipe for competitive disaster. In addition, Dish has no wireless infrastructure of its own and has been sitting on spectrum for years without any clear plan to build a network. No type of network sharing arrangement with T-Mobile will lower wireless prices or actually force Dish to build out its own network.
“The commitments the companies have made and the behavioral conditions associated with this deal are unenforceable and riddled with loopholes that do nothing to address the competitive harms. Neither the DOJ nor FCC have the ability to enforce Dish as a viable fourth competitor.
“Despite the addition of Dish, this is still a four-to-three merger where Verizon, AT&T, and a post-transaction T-Mobile will call all of the shots. Consumers can expect to see higher prices, fewer choices, and less innovative offerings across the board. Low-income and marginalized communities who rely on prepaid services from T-Mobile and Sprint will face significant consequences and potentially get priced out of wireless service.
“Our democracy functions best when all Americans have access to robust and affordable broadband services. There are no benefits to a three-firm marketplace that can price out millions of low-income customers and widen the digital divide. Fortunately, fourteen state attorneys general have filed a lawsuit to block this merger. We look forward to supporting their legal effort and continuing to mobilize opposition against this merger, which poses a significant danger to our democracy.”
To read Common Cause’s FCC petition to deny, click here.
To read Common Cause’s testimony before the California Public Utilities Commission, click here.