T-Mobile and Sprint have reached a $26 billion deal to merge, a proposal that critics say would further consolidate power and harm competition in the wireless market. (Photo: Justin Sullivan/Getty Images)
May 01, 2018
Sen. Elizabeth Warren (D-Mass.) was among the critics of the newly-proposed merger between Sprint and T-Mobile who called for a thorough investigation into the deal, saying it would further reduce competition in the wireless marketplace and consolidate power in the hands of just three carriers.
\u201cThe proposed merger between Sprint and T-Mobile could strangle competition in the telecom industry and end up hurting small businesses, entrepreneurs, and working families. @TheJusticeDept and FCC need to give this deal a long, hard look.\u00a0\nhttps://t.co/cg3EImLNOo\u201d— Elizabeth Warren (@Elizabeth Warren) 1525136672
The deal was reached after numerous past attempts by the two companies to merge, as well as a proposed takeover of T-Mobile by AT&T, which was blocked by the Federal Communications Commission (FCC) in 2011 on the grounds that it would stifle competition.
The $26.5 billion deal would give the newly-formed corporation a combined 125 million customers and, according to T-Mobile and Sprint, would enable the entities to create a high-capacity 5G wireless network that could compete with at-home broadband connections provided by cable companies.
Groups including Free Press argue that the merger would serve only the interests of the two companies, despite T-Mobile and Sprint's claims that they would merge while increasing hiring and without raising prices--both uncommon for corporate mergers.
"No one but T-Mobile and Sprint executives and Wall Street brokers wants to see this merger go through," said Matt Wood, policy director of Free Press, in a statement. "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."
As the New York Times Editorial Board noted, the benefits promised by the two companies are "implausible," especially as T-Mobile and Sprint say they plan to cut their costs by $6 billion per year.
"T-Mobile is promising that it will continue to operate as a scrappy upstart even after swallowing Sprint, which has struggled to win over customers and is saddled with $32 billion in debt," wrote the editors. "But there is no guarantee of that. In fact, becoming much larger could change the financial calculus at T-Mobile, encouraging it to raise prices to lift profits and pay off Sprint's debt."
As former FCC Chairman Michael Copps, now an adviser at Common Cause, noted, "Low-income consumers and other vulnerable communities seeking more affordable mobile communications services would be particularly hurt from the merger," considering the two companies have offered lower prices in the past than AT&T and Verizon.
FCC Chairman Ajit Pai has shown no indication in his 15-month tenure that he'll halt deals like the T-Mobile and Sprint merger, reversing a 42-year-old broadcast ownership rule last year that had prevented the consolidation of power by media companies.
"There's a reason [Sprint and T-Mobile] are trying to rush through a deal before adult regulatory supervision inevitably returns to fashion," wrote Karl Bode at VICE.
"Unless Ajit Pai 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," said Wood.
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Sen. Elizabeth Warren (D-Mass.) was among the critics of the newly-proposed merger between Sprint and T-Mobile who called for a thorough investigation into the deal, saying it would further reduce competition in the wireless marketplace and consolidate power in the hands of just three carriers.
\u201cThe proposed merger between Sprint and T-Mobile could strangle competition in the telecom industry and end up hurting small businesses, entrepreneurs, and working families. @TheJusticeDept and FCC need to give this deal a long, hard look.\u00a0\nhttps://t.co/cg3EImLNOo\u201d— Elizabeth Warren (@Elizabeth Warren) 1525136672
The deal was reached after numerous past attempts by the two companies to merge, as well as a proposed takeover of T-Mobile by AT&T, which was blocked by the Federal Communications Commission (FCC) in 2011 on the grounds that it would stifle competition.
The $26.5 billion deal would give the newly-formed corporation a combined 125 million customers and, according to T-Mobile and Sprint, would enable the entities to create a high-capacity 5G wireless network that could compete with at-home broadband connections provided by cable companies.
Groups including Free Press argue that the merger would serve only the interests of the two companies, despite T-Mobile and Sprint's claims that they would merge while increasing hiring and without raising prices--both uncommon for corporate mergers.
"No one but T-Mobile and Sprint executives and Wall Street brokers wants to see this merger go through," said Matt Wood, policy director of Free Press, in a statement. "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."
As the New York Times Editorial Board noted, the benefits promised by the two companies are "implausible," especially as T-Mobile and Sprint say they plan to cut their costs by $6 billion per year.
"T-Mobile is promising that it will continue to operate as a scrappy upstart even after swallowing Sprint, which has struggled to win over customers and is saddled with $32 billion in debt," wrote the editors. "But there is no guarantee of that. In fact, becoming much larger could change the financial calculus at T-Mobile, encouraging it to raise prices to lift profits and pay off Sprint's debt."
As former FCC Chairman Michael Copps, now an adviser at Common Cause, noted, "Low-income consumers and other vulnerable communities seeking more affordable mobile communications services would be particularly hurt from the merger," considering the two companies have offered lower prices in the past than AT&T and Verizon.
FCC Chairman Ajit Pai has shown no indication in his 15-month tenure that he'll halt deals like the T-Mobile and Sprint merger, reversing a 42-year-old broadcast ownership rule last year that had prevented the consolidation of power by media companies.
"There's a reason [Sprint and T-Mobile] are trying to rush through a deal before adult regulatory supervision inevitably returns to fashion," wrote Karl Bode at VICE.
"Unless Ajit Pai 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," said Wood.
Sen. Elizabeth Warren (D-Mass.) was among the critics of the newly-proposed merger between Sprint and T-Mobile who called for a thorough investigation into the deal, saying it would further reduce competition in the wireless marketplace and consolidate power in the hands of just three carriers.
\u201cThe proposed merger between Sprint and T-Mobile could strangle competition in the telecom industry and end up hurting small businesses, entrepreneurs, and working families. @TheJusticeDept and FCC need to give this deal a long, hard look.\u00a0\nhttps://t.co/cg3EImLNOo\u201d— Elizabeth Warren (@Elizabeth Warren) 1525136672
The deal was reached after numerous past attempts by the two companies to merge, as well as a proposed takeover of T-Mobile by AT&T, which was blocked by the Federal Communications Commission (FCC) in 2011 on the grounds that it would stifle competition.
The $26.5 billion deal would give the newly-formed corporation a combined 125 million customers and, according to T-Mobile and Sprint, would enable the entities to create a high-capacity 5G wireless network that could compete with at-home broadband connections provided by cable companies.
Groups including Free Press argue that the merger would serve only the interests of the two companies, despite T-Mobile and Sprint's claims that they would merge while increasing hiring and without raising prices--both uncommon for corporate mergers.
"No one but T-Mobile and Sprint executives and Wall Street brokers wants to see this merger go through," said Matt Wood, policy director of Free Press, in a statement. "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."
As the New York Times Editorial Board noted, the benefits promised by the two companies are "implausible," especially as T-Mobile and Sprint say they plan to cut their costs by $6 billion per year.
"T-Mobile is promising that it will continue to operate as a scrappy upstart even after swallowing Sprint, which has struggled to win over customers and is saddled with $32 billion in debt," wrote the editors. "But there is no guarantee of that. In fact, becoming much larger could change the financial calculus at T-Mobile, encouraging it to raise prices to lift profits and pay off Sprint's debt."
As former FCC Chairman Michael Copps, now an adviser at Common Cause, noted, "Low-income consumers and other vulnerable communities seeking more affordable mobile communications services would be particularly hurt from the merger," considering the two companies have offered lower prices in the past than AT&T and Verizon.
FCC Chairman Ajit Pai has shown no indication in his 15-month tenure that he'll halt deals like the T-Mobile and Sprint merger, reversing a 42-year-old broadcast ownership rule last year that had prevented the consolidation of power by media companies.
"There's a reason [Sprint and T-Mobile] are trying to rush through a deal before adult regulatory supervision inevitably returns to fashion," wrote Karl Bode at VICE.
"Unless Ajit Pai 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," said Wood.
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