The T-Mobile/Sprint merger could be in trouble

The proposed merger between T-Mobile and Sprint has had a long and tumultuous road to travel and just one day before the CEOs of the two companies are set to answer questions from Congress, there's yet another roadblock getting put up. This time, it's a group of democratic senators who have signed a letter opposing the merger between the two companies.

The letter was sent by Senator Richard Blumenthal (D-Conn.) and eight colleagues, including Kirsten Gillibrand (D-NY), Elizabeth Warren (D-Mass.), Cory Booker (D-NJ), and Bernie Sanders (D-Vt.) and argues that the merger would create dangerous market concentration in the wireless space, likely causing subscription costs to go up for consumers, and this could be especially bad for low-income customers who make up the bulk of the prepaid contracts. The senators also argue that the merger would be bad for workers as an estimate from the Communications Workers of America claimed the deal would result in the loss of about 30,000 jobs.

The senators also noted that neither T-Mobile or Sprint have a track record for building out infrastructure in rural areas and the new merged company would have little reason to change that, meaning rural customers would still be bereft of choice for wireless service. And, possibly the most interesting argument made was in reference to the failed AT&T acquisition of T-Mobile from 2011, where exactly because that deal was stopped, T-Mobile was able to create an LTE network that arguably has better coverage than AT&T today.

Of course, these letters were sent to DOJ antitrust chief Makan Delrahim and FCC chairman Ajit Pai, neither of whom have a track record of being anti-consolidation or pro-consumer. Delrahim has been on record not being too worried about the monopolistic power held by companies like Apple, Facebook, or Google; and Pai notably ignored the large public outcry and protests in order to repeal Net Neutrality. So, it's a bit hard to imagine either one paying much attention to these letters.

source: Blumenthal letter