Dems question pledges in $26.5B T-Mobile-Sprint deal

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.

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.

Complicating the executives’ argument is the fact that urban consumers are paying 22 percent less for cellphone service following AT&T’s failed bid to acquire T-Mobile in 2011, a combination rejected by federal regulators as anticompetitive. That data comes from the Bureau of Labor Statistics price index for wireless telephone service.

T-Mobile subsequently launched aggressive promotions and made consumerfriendly changes such as ditching two-year contracts and bringing back unlimited data plans, moves that its rivals soon copied.