The FCC approved the T-Mobile-Sprint merger. Now what?
The Federal Communications Commission may have voted to approve a merger between T-Mobile and Sprint, and the Justice Department also appears on board, but the telecommunication leviathans still must persuade a coalition of state attorneys general.
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The FCC voted along party lines, 3-2, on Wednesday to approve a merger between two of the nation’s largest wireless carriers, the agency confirmed to ABC News, just months after they got clearance from the Department of Justice. The DOJ approved the merger with conditions, including that the companies from Sprint’s prepaid businesses such as Boost Mobile and Virgin Mobile.
Last month, Pennsylvania Attorney General Josh Shapiro became the latest state attorney general to join a lawsuit challenging the merger, joining a coalition that includes New York, California and more than a dozen others.
The states’ lawsuit to block the merger was filed June 11 in the U.S. District Court for the Southern District of New York, according to the New York attorney general’s office. A court date is set for Dec. 9.
Commissioner Jessica Rosenworcel, who voted against the FCC approval of the merger, said, “Consumers deserve better from the Washington authorities charged with reviewing this transaction.”
“We’ve all seen what happens when markets become more concentrated after a merger like this one,” Rosenworcel said in a statement after the vote. “In the airline industry, it brought us baggage fees and smaller seats. In the pharmaceutical industry, it led to a handful of drug companies raising the prices of lifesaving medications. There’s no reason to think this time will be different.”
“Overwhelming evidence,” she added, “demonstrates that the T-Mobile-Sprint merger will reduce competition, raise prices, lower quality, and slow innovation.”
Rosenworcel also referenced the upcoming onset of the next generation of wireless networks, 5G.
“With 5G on the horizon, our dependence on wireless connectivity is bound to grow,” she said. “It’s not the time to count on ineffective deployment commitments, higher prices and less vigorous competition to help the benefit of this new technology reach us all.”
Commissioner Geoffrey Starks, who also voted against the merger, said in a separate statement that “you don’t need to be an expert to know that going from four wireless carriers to three will hurt competition.”
“This merger takes a bad situation and makes it worse,” he added. “Higher prices and fewer options across the country will inevitably result. Quite simply, the effects of this ill-conceived merger will hit low-income and rural communities hardest of all.”
Starks said that the deal approved Wednesday “has changed significantly from the one that was originally proposed — twice,” noting that not enough time for public comment was allotted to address these changes.
“While I hope for the sake of consumers that I am wrong, I fear that we will one day look back at this decision and recognize it as a moment that forever changed the U.S. wireless industry, and not for the better,” he said.
In August, however, FCC chairman Ajit Pai formally endorsed the merger, expressing his recommendation for approval saying that it would advance 5G deployment across the U.S.
“After one of the most exhaustive merger reviews in Commission history, the evidence conclusively demonstrates that this transaction will bring fast 5G wireless service to many more Americans and help close the digital divide in rural areas,” Pai said in a statement.
Pai also argued that “the merger will promote robust competition in mobile broadband, put critical mid-band spectrum to use, and bring new competition to the fixed broadband market.”
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