T-Mobile's merger hits another hurdle, the argument that it will prevent 'future Apples'
Back in June, a number of state attorney generals plus the District of Columbia filed a lawsuit in New York seeking to block the formation of the New T-Mobile after its merger with Sprint. The argumentation is that the merger will raise prices by $4.5 billion a year or more in the longer run, despite T-Mobile's pledge that it will freeze its pricing for three years after the deal closes.
Even though the last regulatory hurdle - the Department of Justice - signed off on the deal with the condition that Dish will buy Boost and form a fourth carrier, that AG lawsuit will have to be resolved somehow if things are to proceed. The plaintiffs are now asking for the trial to be postponed from October 7 to December 9 with the argument that they need more time to acquaint themselves with all the DoJ-Dish-T-Mobile settlement details. New York AG Letitia James chimed in on last week's DoJ stamp of approval with the following:
While this may seem like another boilerplate statement in the same anti-trust vein, another player has now entered the fray, the consumer protection and privacy-obsessed Electronics Frontier Foundation (EFF). Their argument is actually broader than the one in the AG lawsuit:
5G services can reach U.S. Internet users without the merger. The means of delivering those services is through government-regulated licenses. Those licenses can be modified with new policies to promote competition and access. In particular, instead of approving anti-competitive mergers, the government could simply change the terms of the licenses it gives companies for their use of spectrum, the radio frequencies used to transmit services.
Now it is up to the courts to decide if this merger can proceed. Ten state Attorneys General have sued to block this merger and they will make the case that what Sprint and T-Mobile are attempting is illegal. The difference this time is that unlike the last time the federal and state governments blocked a wireless telecom merger (the DoJ’s successful challenge to the proposed AT&T-TMobile merger in 2011), the DOJ and the FCC will be on the side of the monopolists in the courtroom.
As you can see, there is plenty for the courts to sift through here, and new arguments against the merger keep piling up. Whether or not these actions against the DoJ's approval of the deal will bear fruit remains to be seen, but one thing is for sure - the merger of T-Mobile with Sprint will not be happening this year.