T-Mobile CEO John Legere, left, and Sprint Executive Chairman Marcelo Claure are sworn in last June, prior to discussing the proposed merger before the Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights.
Mandel Ngan/Getty Images
Democrats on the Senate Commerce Committee are calling for a hearing on the proposed $26 billion merger between T-Mobile and Sprint.
In a letter to Republican leadership Thursday, Sens. Ed Markey of Massachusetts, Amy Klobuchar of Minnesota, Tom Udall of New Mexico, Tammy Baldwin of Wisconsin and Richard Blumenthal of Connecticut expressed concern the merger would have negative consequences for consumers.
“The merger of T-Mobile and Sprint would reduce the number of national wireless carriers from four to three,” the senators said. “This reduction in competition raises a number of important questions that the committee should address.”
Opponents of the merger say the reduction in competitors would consolidate the market too much. Supporters, however, including the companies, say scale is needed to build new 5G infrastructure and to compete in a market that’s quickly becoming commodity.
Last June a Senate Judiciary Committee subcommittee held a hearing on the merger, but senators on the Commerce Committee say questions still need answering.
Specifically, the senators argue that reducing the number of national players will result in higher prices, fewer choices and less flexibility in switching carriers. They point to the competitive pricing and promotions both T-Mobile and Sprint have offered in the market, which have pressured AT&T and Verizon to lower prices and ditch contracts.
They also point to the fact that in 2011 the Federal Communications Commission and the Justice Department each concluded that AT&T’s acquisition of T-Mobile should be rejected based on the notion that a reduction in national carriers would harm consumers.
In addition, they question Sprint and T-Mobile’s argument that the merger is necessary to build out 5G infrastructure. 5G is the next generation of wireless. It’s expected to be faster and more responsive than today’s technology and to help usher in new technologies and services like self-driving cars and advanced virtual reality.
Because 5G will be very expensive to build, the companies have argued they need the scale of a larger, combined company to afford the build-out of such a network.
But the senators aren’t buying that position.
“T-Mobile and Sprint have argued that their merger is necessary for successful deployment of a robust nationwide 5G network, despite previous individual assertions by each company made prior to the merger boasting of their own progress building towards 5G,” the senators wrote.
While the FCC’s review of the merger is on hold during the partial government shutdown, opposition to the deal is growing. A group called the 4Competition Coalition was formed last month to challenge the merger. Several rural carriers, including C Spire, Blue Wireless and Pine Belt Cellular have joined the coalition. The group now has 23 members.
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