California’s Public Advocates Office argues strongly against T-Mobile/Sprint merger

California’s Public Advocates Office, a nonpartisan and publicly funded agency that advocates on behalf of California residents with respect to energy, water, and communications regulations, strongly recommended a denial of T-Mobile’s proposed merger with Sprint. In testimony given to California’s Public Utilities Commission, the office said the proposed transaction should be blocked “because of the irreparable damage to competition in the wireless market and the low-income customer markets as well as the absence of specific, measurable and verifiable benefits attributable to the merger.” Losing a competitive player in these markets “would create significant risk of parallel conduct and higher pricing for consumers,” particularly if, as proposed, the “New T-Mobile would rival or exceed [AT&T and Verizon] in market share, creating a strong incentive for oligopolistic behavior,” the office testified. The combined company would also “comprise nearly 60% of the wireless prepaid market that predominantly serves low-income customers, placing excessive market power under the control of a single company and creating a virtual monopoly over these services.”