USA TODAY International Edition
Opposing view: Merger would raise prices and hurt consumers
Whether talking about cars, baby food or cellphones, competition has always been a driver of innovation and lower prices. That’s why I and nine other attorneys general have sued to halt the merger of T-Mobile and Sprint.
This megamerger would not only harm mobile subscribers by reducing access to affordable service, but also would particularly affect lower-income and minority communities in my home state of New York and other urban areas across the country.
In recent years, intense competition, spurred in particular by T-Mobile and Sprint, has meant declining prices, increased coverage and better quality for all wireless subscribers. According to the Labor Department, the average cost of mobile services has fallen by roughly 28% since 2009, while mobile data consumption has grown rapidly.
The costs to consumers should, alone, be enough to stop this merger, but just think how far four companies — instead of three — racing to develop new technologies could propel the United States forward. And, while these two telecommunications giants might want to claim that their pooled resources would help them modernize quicker, I would remind them that America was the world leader in developing 4G coverage as a result of vigorous competition.
A merger between T-Mobile and Sprint would end competition between the two carriers with the greatest incentives to keep prices low and innovate. This isn’t speculation but widely accepted economic theory. Studies from Europe and Canada show that in countries with fewer wireless providers, consumers paid substantially more — as much as 27% more — and promised innovations never emerged.
Competition and innovation are the foundations of a healthy economy, empowering consumers to decide which companies grow and which don’t by voting with their wallets.
A megamerger between competitors takes that power away.
T-Mobile and Sprint have tried to make the case that one mega company could better serve consumers, but, quite simply, bigger isn’t always better.