News

4Competition Coalition urges FCC to reject T-Mobile-Sprint merger

14 Dec, 2018

A diverse array of concerned companies, consumer organizations, labor unions, and industry associations formed the 4Competition Coalition, a new alliance to urge policymakers to block the T-Mobile-Sprint merger as currently proposed.

The 4Competition Coalition believes the T-Mobile-Sprint merger as currently proposed runs afoul of our nation's antitrust laws and gives the combined company both the incentive and ability to raise prices and block new players from entering the market. Given the clear reduction in competition, false promises made by Sprint and T-Mobile, and tens of thousands in potential job losses, there is no way to solve the anti-competitive harms this deal would cause:

Higher prices: Reducing consumer choice from four to three wireless carriers means higher prices for consumers in every corner of the country. Letting two "maverick" companies like Sprint and T-Mobile combine into one mega-carrier drastically reduces their incentive to compete on price and match innovative service offerings. Wireless prices for consumers could go up by more than 15 percent in many cases, according to one credible analysis. Sprint and T-Mobile's own economists have confirmed that prices will go up as a result of this deal.
Foreclosing competition: Giving consumers a truly competitive marketplace over the long term requires new entrants that can shake up the wireless landscape. Some facilities-based Mobile Virtual Network Operators (MVNOs), which marry their technology with a nationwide carrier's network to provide wireless service, are entering the wireless market and creating the potential for competition as new players. But if this deal goes through, the New T-Mobile would be in a position to block these new competitors. And, while Sprint and T- Mobile have claimed that Sprint cannot continue to compete on its own, the truth is that Sprint is not a failing firm and does not need this merger to continue competing.
Job losses: Letting these two companies combine is a bad deal for workers. The deal threatens to eliminate as many as 30,000 jobs across the country, according to the Communications Workers of America. Sprint and T-Mobile have promised billions in "cost synergies" – that's corporate-speak for job cuts.
5G: Sprint and T-Mobile say that the deal is necessary for America to have a nationwide 5G network – but their own words prove them wrong. Before the deal was announced, both firms aggressively touted their ability and plans to launch 5G networks as standalone companies. And both Verizon and AT&T also plan to deploy 5G. The promise of 5G wireless is already on its way without this merger – we don't need to sacrifice competition to get there.
Harm to rural consumers: Sprint and T-Mobile are also dangling promises of improved rural coverage in front of regulators. But this is a false promise, contradicted by their own filings to the FCC and lack of desire of either entity to build out rural networks in the past. The truth is the deal does nothing to help out rural Americans and could mean they pay even higher prices or lose coverage altogether. Indeed, the proposed transaction will likely raise costs for rural consumers due to the increased cost of roaming associated with the elimination of Sprint from the wireless marketplace.

"T-Mobile and Sprint's vague promises to create jobs and provide better service to rural America do not meet the public interest test for approval of the merger," said Debbie Goldman, research and telecommunications policy director, Communications Workers Association. "The data and the companies' own track records demonstrate how the merger would hurt U.S. workers and consumers. The merger would eliminate 30,000 jobs across the country, while reducing competition and raising prices for consumers, especially for price-conscious prepaid wireless customers. T-Mobile's January 2018 acquisition of iWireless, a regional carrier in Iowa, shows exactly what happens to U.S. jobs when T-Mobile takes over: the company closed more than 72 percent of iWireless corporate stores and more than 93 percent of authorized dealer stores after the acquisition. Unless the companies make a binding commitment not to eliminate jobs, to stop violating federal labor laws, and to fully respect workers' rights, regulators should not approve this merger."

"Americans deserve more choices for wireless service, not fewer," said Phillip Berenbroick, Public Knowledge Senior Policy Counsel. "If this merger is approved, consumers would likely face a price increase of more than 15 percent in many cases for their wireless service – without seeing any of the benefits that these companies promise. The proposed merger is anti-competitive and presumptively unlawful. The bottom line is that when it comes to wireless, consumers need more choices and more competition. Moving from four nationwide carriers to three would be a disaster."

"Far from benefitting rural America, the proposed transaction's negative effect on both the domestic roaming and secondary spectrum markets would actively harm both rural and urban consumers," said Carri Bennet, general counsel, Rural Wireless Association. "The loss of Sprint as a partner would increase roaming rates for small rural carriers and their customers, and T-Mobile's unwillingness to engage in bilateral roaming agreements means that, post-merger, 40 million more consumers would be deprived of access to rural networks that their own universal service fund contributions helped to build. Further, current Sprint spectrum leases will not be renewed and buildout data analysis shows that a combined T-Mobile/Sprint barely moves the needle on LTE/5G build out in rural areas over the next six years – which means that more spectrum would lie fallow in rural areas, not less. RWA has grave concerns that T-Mobile's recent rural call completion abuses – for which the company was fined $40 million – are just a preview of the lengths to which New T-Mobile will go to improve its bottom line to the detriment of consumers."

As of December 13, the members of the 4Competition Coalition are: