T-Mobile/Sprint Reaction from Near and Far

Coverage Type: 

After the announcement T-Mobile would swallow Sprint, here's the reaction.

Phillip Berenbroick, Senior Policy Counsel at Public Knowledge, said, “Sprint and T-Mobile will be hard pressed to demonstrate how their combination would benefit the public interest. This task proves increasingly difficult when a merger drastically reduces competition in the wireless marketplace, as this combination certainly will. If approved, this deal would especially hurt consumers seeking lower-cost wireless plans, as the combined company’s plans would likely increase while competitors AT&T and Verizon would have even less incentive to lower prices. Unless the merging parties can demonstrate clear competitive benefits we have yet to see, we will urge the Department of Justice and the FCC to reject this deal.”

“Unlike good wine or a good movie, this long-rumored deal only gets worse with age and repeat viewings," said Free Press Policy Director Matt Wood. "No one but T-Mobile and Sprint executives and Wall Street brokers wants to see this merger go through. 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. That market has been relatively competitive in recent years, but only because the FCC and DoJ signaled they would block AT&T’s attempted takeover of T-Mobile in 2011, along with T-Mobile and Sprint’s several previous attempts to combine. T-Mobile and Sprint separately have each exerted important competitive pressures on the wireless market, pushing each other and AT&T and Verizon to do things they otherwise wouldn’t — like offering uncapped data plans and dropping burdensome contract requirements. These moves have given people more choices and fairer prices. Maintaining competition from and between T-Mobile and Sprint is particularly important for lower-income families and people of color, many of whom rely on mobile as their only home-internet connection. If T-Mobile and Sprint merge, prices will spike and the digital divide will widen. The notion that this deal would produce better wireless services is a flat-out fiction. We’ve seen the results from the tax cuts and other destructive deregulation in the Trump era. The combined entity here would just use this deal to line its own pockets, pay down the massive debt these companies carry, and reward shareholders with more stock buybacks. It would fund further acquisitions of content companies, too, as wireless carriers like Verizon and AT&T rush to join the race for targeted advertising revenues built on privacy abuses like those already built into Facebook’s and Google’s ad models. The legal standard for approving giant horizontal mergers like this is not whether Wall Street or President Trump and his cronies likes it. Communications mergers must enhance competition and serve the public interest. This deal would do just the opposite: It would destroy competition, eliminate jobs and harm the public in numerous irreversible ways. So unless Ajit Pai wants 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.”

Jonathan Schwantes, senior policy counsel for Consumers Union, said, “This merger raises several red flags for consumers. If the national wireless market shrinks from essentially four companies to three, history suggests the negative impact on competition would mean higher prices for many people. Right now, Sprint and T-Mobile provide much-needed alternatives to Verizon and AT&T, with some innovative plans and pricing options that keep some semblance of competition alive. If you combine these two companies, those incentives and options could dry up, and people could see prices shoot up, not only for monthly service plans, but for equipment prices as well. Compared to industries like cable, wireless is the rare telecommunications market with at least a few comparable choices for consumers.  Head-to-head competition leads to direct benefits for consumers, like unlimited data offers and low-cost equipment lease plans.  The question is whether those consumer choices fade away and disappear if this merger is approved. Over the past decade, the estimated percentage of American adults who own a cellphone has grown from 78 percent to 95 percent. Many of us depend on wireless service every single day, not just for talking and texting, but for getting information, finding directions, shopping for the things we need, getting help in an emergency, and much more. Regulators have been skeptical of a combination like Sprint-T-Mobile in the past, and they blocked deals like AT&T’s bid for T-Mobile in 2011. The government should remain skeptical of any deal that leaves Americans with fewer choices for wireless service.”

"Consumers will be the losers if T-Mobile and Sprint are allowed to merge.  Both companies have been feisty competitors to the two biggest national mobile wireless carriers, Verizon and AT&T, introducing consumer friendly pricing and data plans that have pushed the big two to lower their prices and expand their data offerings. This combination will not only result in less choice for consumers, it will provide greater incentive for the 3 remaining companies to act in concert. No one should be fooled by claims that the market for mobile wireless phone and data services has changed. Cable company mobile services are nascent and are only available to each company’s cable customers.  Moreover, cable companies don’t own mobile wireless networks, they merely resell capacity from incumbent carriers.  Dish Network controls a lot of spectrum, but has ZERO mobile wireless customers.  Nor is there a need for the companies to merge to invest in infrastructure for new 5G wireless services.  Both companies are already building that infrastructure, and have significant resources to continue to do so. There is not one good reason for the Department of Justice or the FCC to permit the mobile wireless market to shrink from 4 to 3. This deal must be blocked," said Gigi Sohn is a Distinguished Fellow at the Georgetown Law Institute for Technology Law & Policy  and a Mozilla Fellow.

“When the FCC and DOJ analyze the Sprint and T-Mobile merger filing, we ask them to protect Latinos and low-income consumers so that they are not disproportionately harmed by increased prices associated with market consolidation. In an already anti-competitive market, it is deeply concerning that this merger would leave consumers with only three choices in wireless providers. Consumers need more choice and competition, not less. Sprint and T-Mobile have a lot of work to do to prove that this merger is in fact in the public interest," said National Hispanic Media Coalition CEO Alex Nogales.

John Windhausen, Jr., Executive Director of the Schools, Health & Libraries Broadband (SHLB) Coalition, said, "The announcement by Sprint and T-Mobile that they intend to merge raises a host of important questions for anchor institutions and for consumers.  How will this merger affect the delivery of data services to low-income students, especially those using the 2.5 GHz (EBS) band of spectrum? Will this merger promote greater or lesser investment in 5G networks serving anchor institutions?  What effect will the merger have on consumer prices? The SHLB Coalition encourages the Department of Justice to examine whether this merger will promote or harm competition, and encourages the Federal Communications Commission to examine the merger closely to see if it meets the public interest."

"A proposed merger between Sprint and T-Mobile would pose significant public interest harms for consumers," said Common Cause Special Advisor (and former FCC Commissionner and Chairman) Michael Copps. "The merger would cut the number of national wireless carriers from four to three, which would reduce competition in the wireless marketplace. Consumers would see no benefit to a marketplace where Verizon, AT&T, and T-Mobile call all of the shots. Instead, consumers can expect to pay higher prices and see fewer competitive options in the marketplace. Low-income consumers and other vulnerable communities seeking more affordable mobile communications services would be particularly hurt from the merger."

“This merger probably would have happened years ago if the Obama-era FCC hadn’t been so fixated on keeping four national players in the market,” said TechFreedom President Berin Szóka. “Given Sprint’s steadily shrinking market share and T-Mobile’s modest gains, there’s just no evidence for the idea that having two weak companies in lanes three and four is better for consumers than having a stronger third competitor. Just the opposite: Wireless carriers have already invested hundreds of billions of dollars in their networks, but they’ll have to make huge increases in overall investment to build out the network of small cells needed for next-generation 5G service. Analysts estimate that, by 2026, there will be five times as many 5G small cells as there are wireless towers today. Sprint and T-Mobile have lagged behind AT&T and Verizon in deploying 4G networks. The combined company will be able to keep up far better. It’s absurd to think that any regulator knows better than T-Mobile what the company needs to be a stronger competitor. As a distant number three player, the company clearly has no market power today, so there’s no reason to regulators should second-guess the company’s business decisions. T-Mobile has long forced AT&T and Verizon to lower prices and make other improvements, such as restoring the unlimited data plans they had abandoned. Consumers should expect more of the same from T-Mobile after the merger. While there’s nothing magic about the number four, this merger doesn’t necessarily mean the U.S. will only ever have three nationwide carriers. Cable companies are currently testing 5G networks of their own. They’ve already built huge wi-fi mesh networks. They may yet offer something that many consumers will consider a viable alternative for one of today’s wireless networks. Google has toyed with, but abandoned, plans to provide 5G service from drones, but there’s no telling what the company, or Facebook, might do in the future. Google’s Project Fi, which resells service on the T-Mobile and Sprint networks, combined with wi-fi hotspots, illustrates how the wireless market is still evolving.”

"Sprint has been a vital source of economic development and jobs in the Kansas City area for many years," said Sen Jerry Moran (R-KS), "and I urge the new company's leadership from the recently announced merger with T-Mobile to continue growing and innovating in Kansas. As the Chairman of the Commerce Subcommittee with jurisdiction over the welfare of consumers, including enforcement of certain mergers and acquisitions, I plan to closely monitor developments beyond this announcement. As the nation seeks to continue its mission of closing the Digital Divide by bringing high-speed broadband access to rural America, I look forward to seeing Kansas maintain its leadership role as a telecommunications and technology destination for industry and workforce."

Sen Amy Klobuchar (D-MN) -- the Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights -- said "This merger by T-Mobile and Sprint raises serious antitrust issues, and is exactly why I urged the FCC and DOJ to investigate a potential merger last year. Competition among the four largest cell phone carriers has led to lower prices, better service and more innovation. I remain concerned that increased consolidation could undermine benefits to consumers."

T-Mobile/Sprint Reaction from Near and Far Consumers Union statement on proposed Sprint-T-Mobile merger (Consumers Union) Statement of Gigi Sohn on Proposed Merger of T-Mobile and Sprint (Gigi Sohn) Sprint and T-Mobile Will Need to Show How Fewer Choices Benefits Consumers (NHMC) SHLB Raises Questions about Impact of Sprint and T-Mobile Merger On Anchor Institutions and Consumers (SHLB) A Sprint-T-Mobile Merger Would Harm Consumers and Reduce Competition (Common Cause) Combining Sprint & T-Mobile Will Benefit Consumers (TechFreedom) Statement (Sen Moran) Statement (Sen Klobuchar) Sprint-T-Mobile Deal Will Reduce Wireless Competition, Likely Increase Prices and Curtail Innovation (Public Knowledge)