Critics Warn 'Consumers Will Pay the Price' After GOP-Controlled FCC Approves T-Mobile/Sprint Merger
Consumers advocates called out Republicans on the Federal Communications Commission Wednesday for a party-line vote approving a “blatantly anti-competitive” proposed merger between T-Mobile and Sprint, the third- and fourth-largest wireless carriers in the United States.
“With less competition, rates rise and innovation falls… If this merger succeeds, consumers will pay the price.”
—Jessica Rosenworcel, FCC
S. Derek Turner, research director at the national advocacy group Free Press, took aim at FCC Chair Ajit Pai, an appointee of President Donald Trump and former telecommunications industry lawyer who publicly backed the deal months before commission staffers completed a review of it.
Pai formalized his support for the $26.5 billion merger in August, with a statement that emphasized its supposed benefits but lacked any evidence. Critics warn that allowing two major wireless providers to become one will drive up costs for consumers.
“Despite Chairman Pai’s bogus claims, nothing about this deal would lower prices for customers or lead to faster 5G deployment,” said Turner. “And the loss of competition would disproportionately harm low-income people and communities of color.”
Democratic FCC Commissioner Jessica Rosenworcel, who voted against the merger, detailed her concerns about its consequences in an op-ed for The Atlantic ahead of Wednesday’s vote.
“We’ve all seen what happens when market concentration increases following a merger,” Rosenworcel wrote. “A condensed airline industry brought us baggage fees and smaller seats, even as the price of fuel fell. A condensed pharmaceutical industry has led to a handful of drug companies raising the prices of lifesaving medications, taking advantage of those struggling with illness.”
“There’s no reason to think the mobile-phone industry will be different,” she added. “With less competition, rates rise and innovation falls. All the evidence demonstrates that this holds true in the mobile-phone industry too. If this merger succeeds, consumers will pay the price.”
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The U.S. Department of Justice signed off on the deal in July—but, purportedly to address competition concerns, made the merger contingent on Sprint selling some parts to the satellite television provider Dish Network Corp. DOJ Antitrust Division Assistant Attorney General Makan Delrahim claimed the deal would would enable Dish to “provide a full range of mobile wireless services nationwide.”
Gigi Sohn, a former FCC senior staffer who is now a distinguished fellow at the Georgetown Law Institute for Technology Law & Policy and a Benton Foundation senior fellow, called the Republican-controlled FCC’s decision to approve the merger “the culmination of one of the most irregular and opaque processes in FCC history.”
“The FCC majority prejudged the merits of this merger two months before the Justice Department found the combination of T-Mobile and Sprint to be anti-competitive and required the creation of a new fourth competitor to pass legal muster,” Sohn said in a statement. “Despite this radical change in the merger, Chairman Pai has refused to put the new arrangement out for public comment.”
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“Given the harmful impacts of this merger and the shady manner in which the FCC’s approval was reached behind closed doors, the public should have had the opportunity to weigh in… But public input isn’t to be taken seriously at Pai’s FCC.”
—S. Derek Turner, Free Press
Turner of Free Press said Wednesday that “given the harmful impacts of this merger and the shady manner in which the FCC’s approval was reached behind closed doors, the public should have had the opportunity to weigh in and comment before the full agency voted. But public input isn’t to be taken seriously at Pai’s FCC.”
Although the deal has won the approval of regulators at the FCC and DOJ, Turner highlighted that “ultimately, this matter will be decided on the facts in court.”
“The good news is that attorneys general from more than a dozen states and the District of Columbia have joined a lawsuit to block the merger,” explained Turner, who denounced the deal as “both awful and unlawful.”
According to Reuters, the trial is scheduled to begin Dec. 9. The group of 17 state AGs represent more than half of the country’s population.
New York Attorney General Letitia James, who is leading the suit with Xavier Becerra of California, said earlier this year that state leaders are challenging the merger “because it would bad for consumers, bad for workers, and bad for innovation.”
Sohn declared that “once again, the states are standing up for consumers when the federal government has refused to do so.”
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