Ten state attorneys general including New York and California have filed a lawsuit to block the $26 billion proposed merger of T-Mobile and Sprint, citing substantial decreases to competition and consumer harm.
Joining New York and California as plaintiffs in the suit filed Tuesday in the U.S. District Court for the Southern District of New York are Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia, and Wisconsin.
The complaint asserts the pending merger will eliminate direct between T-Mobile and Sprint, which are currently the nation’s third and fourth-largest wireless carriers, as well as significantly decrease overall market competition amongst the remaining national carriers.
The state attorneys general said the deal would likely cause prices to climb higher, while reducing the quantity and quality of wireless service.
“The combination of Sprint and T-Mobile will result in New T-Mobile having a market share greater than AT&T or Verizon and, as a result, New T-Mobile will no longer have incentives to behave as a maverick by lowering prices and/or improving quality,” the complaint reads. “By eliminating an independent competitor, the proposed transaction likely will reduce the competitive incentive for all MNOs to offer new rate plans and services that are valuable to consumers.”
The Federal Communications Commission gave the deal the greenlight last month, but today’s complaint states that commitments made to the FCC by Sprint and T-Mobile won’t alleviate harms to competition and consumers that would result from the merger.
Promises related to 5G network buildouts including rural areas and in-home broadband service don’t provide “verifiable, merger-specific benefits to retail mobile wireless telecommunication subscribers,” according to the complaint. It also says that T-Mobile and Sprint’s agreement to divest prepaid brand Boost Mobile won’t restore competition as the service provider would still operate as an MVNO and not be able to compete in terms of price or quality.
The Department of Justice still has yet to sign off on the deal, and has reportedly been considering additional concessions to ensure wireless competition is maintained in the U.S. market.
