Lawmakers object to wireless merger

WASHINGTON — Democratic lawmakers challenged top executives of T-mobile and Sprint on Wednesday over their pledge not to raise prices for wireless services or hurt competition if their $26.5 billion merger goes through.

At a hearing by a House committee, the two executives defended the deal, which would combine the nation’s third- and fourthlargest wireless companies and create a behemoth about the size of industry giants Verizon and AT&T.

Committee members from both parties fretted about the potential impact of a

T-mobile-sprint merger on rural customers and carriers in rural areas that strike deals with major wireless companies. Many of the lawmakers on the Energy and Commerce subcommittee represent rural areas and small towns, and they voiced concern over jobs that could be lost in the merger in the companies’ call centers and other facilities.

T-mobile has committed to federal regulators, who must approve the deal, not to raise prices for three years following the merger.

But Rep. Frank Pallone, D-N.J., chairman of the full Energy and Commerce Committee, said he isn’t sure that Trump administration regulators would be willing to hold T-mobile to that promise.

“How can we be sure that consumers who can least afford to pay more are not harmed by the merger?” Pallone asked.

Congress doesn’t have authority to rule on the merger, but lawmakers can ask pointed questions and raise concerns to regulators who are reviewing it. Now that Democrats control the House of Representatives and the Energy and Commerce Committee, they have convened the panel’s first merger-review hearing in eight years.

T-mobile US CEO John Legere and Marcelo Claure, Sprint Corp.’s executive chairman, defended the merger and said American consumers would get more and pay less. Legere said T-mobile’s analysis shows that consumers would save $7 billion to $13 billion a year by 2024.

“We can take competition to new levels,” he testified. “We will offer a much faster, broader and deeper network, and new services at lower prices. This will force our rivals — AT&T, Verizon and the cable monopolies — to improve their services, increase their own capacity and lower prices even further.

“Rural America will disproportionately benefit,” Legere assured the lawmakers.

But after a failed merger between AT&T and T-mobile in 2011, urban consumer prices have dropped 22 percent, according to the Bureau of Labor Statistics.

Federal regulators’ rejection of the deal pushed T-mobile to introduce promotions like unlimited data plans and no two-year contracts, which competitors copied. Merger opponents claim those benefits will disappear if T-mobile and Sprint no longer competed against each other.

Unions worry about job losses.

“Let’s tell it like it us: This merger would kill American jobs,” insisted Chris Shelton, president of the labor union Communications Workers of America, who also testified to the panel.

The CWA’S analysis found that job cuts could number up to 30,000, mostly because T-mobile would close thousands of overlapping stores.

Legere said the merger would deliver some 5,600 new jobs by 2021. They would include positions in five new “customer experience centers” around the country.

At least one Democrat, Rep. Anna Eshoo, a Democrat from California whose district includes Silicon Valley, said she supports the merger.

The deal faces reviews by the Justice Department and the Federal Communications Commission. U.S. wireless carriers had been unable to get a merger deal through under President Barack Obama. But after President Donald Trump’s election, a more business-friendly FCC deemed the wireless market “competitive” for the first time since 2009, a move that some experts believe could make it easier to win approval for a merger.