10 states sue to stop T-mobile, Sprint merger
A group of state attorneys general, led by New York and California, filed a federal lawsuit Tuesday to block T-mobile’s $26.5 billion bid for Sprint, citing consumer harm.
The state attorneys general said the merger would hurt competition and drive up prices for cellphone service. They said the promised benefits, such as better networks in rural areas and faster service overall, cannot be verified, and that eliminating a major wireless company will immediately harm consumers.
New York Attorney General Letitia James said in a prepared statement that combining the two companies would “cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans.” She said the deal would particularly affect lower-income and minority communities in New York and other urban areas.
Other attorneys general joining Tuesday’s lawsuit are from Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia and Wisconsin. All 10 attorneys general are Democrats. The lawsuit was filed in U.S. District Court in New York.
It’s an unusual step by the state attorneys general ahead of a decision by federal antitrust authorities. The Justice Department’s decision is pending. The Republican majority of the Federal Communications Commission supports the deal.
T-mobile declined comment. Sprint and the Justice Department did not immediately respond to requests for comment.
Amanda Wait, an antitrust lawyer and former Federal Trade Commission lawyer, said states could be suing if they expect the Justice Department to come to a different conclusion than they have reached.
One famous example of when the states and federal government diverged on a big antitrust case was in the fight against Microsoft, although that was not a merger. Several states dissented from the Justice Department’s settlement roughly 20 years ago.
T-mobile and Sprint have argued that they need to bulk up to upgrade to a fast, powerful “5G” mobile network to compete with Verizon and AT&T. The companies are appealing to President Donald Trump’s desire for the United States to “win” a global 5G race.
Consumer advocates, labor unions and many Democratic lawmakers worry that the deal could mean job cuts, higher wireless prices and a hit to the rural cellphone market.
T-mobile and Sprint announced the deal more than a year ago, saying their combined pocketbooks and holdings of “spectrum,” or the airwaves that carry cellphone signals, could result in a better 5G network than what either company could build on its own. It’s an assessment that several Wall Street analysts have agreed with. The United States is in a politically sensitive race with China to be on top as this technology is developed and implemented.