Yesterday, the Federal Communications Commission (FCC) restarted the “shot clock” on its review of the proposed T-Mobile-Sprint merger.
According to Chris Shelton, President of the Communications Workers of America (CWA), “As the FCC re-starts the shot clock, nothing has changed regarding the fundamentals of this anti-competitive merger: combining T-Mobile and Sprint would harm the public interest in the form of 30,000 fewer jobs, lower wages by as much as $3,000 per year, and higher prices for consumers with disproportionate harm to low-income communities. This merger should be opposed as currently structured.”
Below are reminders why the merger is looking less likely, according to leading analysts, and why observers remain concerned about the potential public interest harms:
States expressing concern about potential anti-competitive harms.
A Bloomberg story from last week, “T-Mobile-Sprint Merger Faces Possible Lawsuit by States,” highlights that New York and California are “helping to lead a group of more than a dozen states that are reviewing the merger’s effect on competition,” also noting that these states are “considering a lawsuit to block the deal on antitrust grounds.”
30,000 jobs remain at risk: T-Mobile’s jobs pledges are filled with loopholes.
CWA’s detailed economic analysis projects that 30,000 Americans would lose their jobs if this merger is approved (find a state-by-state breakdown of projected retail job loss here). T-Mobile’s unsubstantiated jobs pledges, meanwhile, are filled with loopholes and would not come close to offsetting the 30,000 jobs that would be lost due to the merger. For example, as CWA President Chris Shelton recently stated in testimony before the Antitrust subcommittee of the House Judiciary Committee, 84 percent of current retail stores are owned and operated by authorized dealers who are not encompassed by T-Mobile’s jobs pledges.
Higher prices for consumers in the spotlight:
Economic analysis filed by the DISH Corporation estimates that prices for prepaid customers’ plans could rise by 15.5% and by 9.1% for postpaid plan customers if the merger proceeds due to the elimination of head-to-head competition between the companies. Bloomberg columnist Tara LaChapelle recently wrote of T-Mobile CEO John Legere’s “somewhat flimsy commitment in February — which came seemingly out of nowhere — to not raise prices for three years following the merger,” noting that the pledge, “left much to be desired ... It’s hard not to interpret that as an admission the combined company would have the ability and incentive to flex its pricing muscle. Here’s a simple question for Legere: If the deal won’t lead to higher prices, why then are shares of Verizon and AT&T sinking on speculation that the deal may be doomed?”
CWA’s latest comments to FCC: companies continue to fall short of public interest standard, overstating claims about rural America, consumer benefits, and in-home broadband.
Last week, CWA filed new comments and accompanying analysis with the FCC, detailing that the companies’ latest filings “do not move the needle for rural America” and overstate claims regarding in-home broadband services. As CWA’s filing noted, the companies “continue to fall far short of demonstrating that the proposed merger of T-Mobile and Sprint, as currently structured, is in the public interest. The harms of the proposed transaction are demonstrable and real, while the alleged benefits are speculative and uncertain” (link to CWA summary press release here with link to full comments online here).