Seventeen state attorneys general have sued to block the T-Mobile/Sprint merger
The T-Mobile/Sprint merger, the subject of a great deal of push back before finally receiving the green light in July, is now being touted as a big “win” for rural America according to a Department of Justice official. The DOJ’s stance is particularly interesting because much of the negativity around the deal had to do with concerns about the market effect of two mobile operator giants teaming up, with some believing the merger would harm rural carriers and low-income customers.
However, the DOJ is saying that the T-Mobile/Sprint merger would actually increase competition and benefit consumers, especially in rural communities. “You’re now going to have Sprint, T-Mobile combined, with the remedies we put in, providing real competition to AT&T and Verizon for the first time to consumers. I think the consumer, particularly in the rural area, is going to win at the end of this, if the merger goes forward,” commented Makan Delrahim, assistant attorney general for the antitrust division at the DOJ.
Delrahim also stated that the $26 billion deal was examined by the agency for 13 months before giving it the go-ahead.
The Federal Communications Commission’s (FCC) chairman Ajit Pai has made his support of the deal known for some time, circulating a draft in August recommending approval.
To address the risk the merger poses for competition and to avoid rendering the U.S. wireless market monopolistic, the DOJ brought in DISH as a potential fourth carrier, granting it additional wireless spectrum from Sprint and T-Mobile for building its wireless network, as well as Sprint’s prepaid services, Boost Mobile, Virgin Mobile and Sprint prepaid.
For their part, T-Mobile and Sprint have stated their intention to provide rural America jobs as the investment on 5G expands, and to set up new customer service centers. The operators have also promised to freeze prices for at least three years and roll out of a nationwide 5G network, including a broadband program offered specifically to rural areas as a fixed wireless broadband solution.
But not everyone is buying it. Seventeen state attorneys general have sued to block the merger, arguing that it will lessen competition, raise prices and result in a substantial job The lawsuit, set to begin on December 9, includes New York, California, Michigan, Oregon and most recently, Illinois.
However, some state attorney generals, like Arkansas’s Leslie Rutledge, have stated their support of the merger. Rutledge recently joined Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Dakota and Utah in this stance, commenting, “Arkansas stands to benefit from the T-Mobile merger with Sprint, which will increase competition, especially in rural areas that have been deprived of reliable wireless service.”
“From our evaluation,” she added, “the merger will result in increased quality and more competitive prices for Arkansans by expanding rural broadband access and expediting 5G technology to provide an essential service for a desperately underserved population.”
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