WASHINGTON — According to multiple press reports, wireless carriers T-Mobile and Sprint are nearing completion of a merger agreement to be announced as soon as this weekend, which would join the nation’s third- and fourth-largest cellphone providers to form a telecommunications giant with nearly 130 million customers.
The proposed merger should and will face major antitrust hurdles, as it would require approval from the Federal Communications Commission and the Justice Department.
In early 2014, then-FCC Chairman Tom Wheeler announced that he would not allow the number of large wireless carriers to shrink from four to three, citing concerns that a lack of choice would be harmful to mobile users. The current chairman, Ajit Pai, has shown a strong tendency to put the financial interests of large media companies before the needs of their customers.
T-Mobile and Sprint are of particular importance to low-income families and people of color. Their prices are lower than those offered by AT&T and Verizon, and they dominate the prepaid and resale markets, where smaller carriers offer even lower-priced and more flexible service plans using wholesale access to T-Mobile and Sprint’s networks. These offerings lessen the impact of the digital divide for those who can’t afford premium services.
Free Press Policy Director Matt Wood made the following statement:
“Unlike good wine or a good movie, this long-rumored deal only gets worse with age and repeat viewings. No one but T-Mobile and Sprint executives and Wall Street brokers wants to see this merger go through. Greed and a desire to reach deeper into people’s wallets by taking away their choices are the only things motivating this deal.
“What we know about the wireless market is that customers actually win when mergers are blocked. That market has been relatively competitive in recent years, but only because the FCC and DoJ signaled they would block AT&T’s attempted takeover of T-Mobile in 2011, along with T-Mobile and Sprint’s several previous attempts to combine.
“T-Mobile and Sprint separately have each exerted important competitive pressures on the wireless market, pushing each other and AT&T and Verizon to do things they otherwise wouldn’t — like offering uncapped data plans and dropping burdensome contract requirements. These moves have given people more choices and fairer prices.
“Maintaining competition from and between T-Mobile and Sprint is particularly important for lower-income families and people of color, many of whom rely on mobile as their only home-internet connection. If T-Mobile and Sprint merge, prices will spike and the digital divide will widen.
“The notion that this deal would produce better wireless services is a flat-out fiction. We’ve seen the results from the tax cuts and other destructive deregulation in the Trump era. The combined entity here would just use this deal to line its own pockets, pay down the massive debt these companies carry, and reward shareholders with more stock buybacks. It would fund further acquisitions of content companies, too, as wireless carriers like Verizon and AT&T rush to join the race for targeted advertising revenues built on privacy abuses like those already built into Facebook’s and Google’s ad models.
“The legal standard for approving giant horizontal mergers like this is not whether Wall Street or President Trump and his cronies likes it. Communications mergers must enhance competition and serve the public interest.
“This deal would do just the opposite: It would destroy competition, eliminate jobs and harm the public in numerous irreversible ways. So unless Ajit Pai wants wants to add yet another blemish to his already disastrous tenure at the helm of the FCC, the chairman should speak out and show us he’s willing to do more than rubberstamp any harmful deal that crosses his desk.”