Sunday, 15 September, 2019

States sue to stop $26.5B Sprint-T-Mobile deal

T-Mobile’s Sprint Deal Should Be on Death WatchMore T-Mobile’s Sprint Deal Should Be on Death WatchMore
Cecil Davis | 12 June, 2019, 03:09

Update, June 11, 2019 (04:45 PM ET): It looks like the sources speaking to Reuters were correct, as today 10 attorneys general filed a lawsuit in an effort to block the T-Mobile-Sprint merger (via The Verge).

"When it comes to corporate power, bigger isn't always better", New York Attorney General Letitia James said in a statement.

The antitrust lawsuit claims that the merger would "deprive consumers of the benefits of competition and drive up prices for cellphone services".

Along with James, nine other attorneys general attached themselves to the suit from states including California, Connecticut, Colorado, the District of Columbia, Maryland, Michigan, Mississippi, Virginia, and Wisconsin.

It's an unusual step ahead of a decision by federal antitrust authorities.

The companies have offered to sell Boost to reduce the combined company's market share in the prepaid business.

Critics say that level of consolidation would hurt consumers by driving up prices-especially since T-Mobile and Sprint now have the largest number of low-income customers among the four major wireless carriers.

While T-Mobile and Sprint have made promises that their merger would offer lightning-fast speeds and increased capacity, the Attorneys General's investigation found that numerous claimed benefits were unverifiable and could only be delivered years into the future, if ever.

The AGs filed their complaint in US District Court for the Southern District of NY.

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The concessions also included penalties if they failed to follow through. T-Mobile and Sprint led the return of unlimited-data cellphone plans, for example.

A formal complaint was filed in NY federal court, and revealed today, claiming that a merger of the third and fourth largest cellular networks in the United States would damage competition and raise bills and prices for millions of Americans.

The two companies previously tried to combine during the Obama administration but regulators rebuffed them.

In May Pai and the FCC gave a thumbs up to the deal with the chairman touting the deal's potential improvements for 5G network deployment and increasing coverage in rural America. The other two Republican commissioners indicated they would join him.

T-Mobile declined comment to the Associated Press, while Sprint and the Justice Department did not immediately respond to requests for comment.

But public-interest advocates said these conditions did not address the deal's main criticisms - higher prices in the long run and less wireless competition- and would be hard for regulators to enforce. Staff attorneys at DOJ have reportedly told the companies they won't approve the deal as proposed, but the ultimate decision lies with Makan Delrahim, the top antitrust official who is a political appointee. The lawsuit further alleges that "Competition in retail mobile wireless telecommunications will be lessened substantially", that retail prices are likely to go up, and that the "quality and quantity of mobile wireless telecommunications services are likely to be less than they otherwise would [be]".

Since being announced past year, T-Mobile's push to merge with Sprint has been met with strong government pushback over concerns it would harm competition.

Japanese tech conglomerate SoftBank owns Sprint, while Germany's Deutsche Telekom owns T-Mobile.