Reaction to DOJ Approval of T-Mobile/Sprint

“Competition is critical to a strong economy—among the four largest cell phone carriers, that competition has led to lower prices, better service, and more innovation. That’s why, when this merger was first reported, I raised serious antitrust concerns about combining two of the four remaining nationwide wireless carriers, and I have since urged the Justice Department to reject the deal as anticompetitive," said Sen Amy Klobuchar (D-MN). "It looked like a bad deal then, and it looks like a bad deal today, despite the parties’ promises and this proposed consent decree.” 

“I am pleased that the U.S. Department of Justice has reached a settlement with T-Mobile and Sprint," said FCC Chairman Ajit Pai. "The commitments made to the FCC by T-Mobile and Sprint to deploy a 5G network that would cover 99% of the American people, along with the measures outlined in the Department’s consent decree, will advance U.S. leadership in 5G and protect competition. In addition, the transaction has garnered bipartisan support, including from Governor Laura Kelly (D-KS), Congresswoman Anna Eshoo (D-CA), and former FCC Commissioner Mignon Clyburn. Because of this transaction’s potential to help close the digital divide in rural America and maintain our nation’s leadership in 5G, as well as the commitments made by T-Mobile and Sprint to the FCC, I plan to present my colleagues soon with a draft order, consistent with the Department’s filings, favorably resolving the FCC’s review of the transaction.”

“Today the Department of Justice gave its blessing to the largest wireless merger in history. I remain skeptical that this combination is good for consumers, good for competition, or good for the economy. Before the FCC votes on this new deal, the public should have the opportunity to weigh in and comment. Too much here has been done behind closed doors," said FCC Commissioner Jessica Rosenworcel.

Gigi Sohn is a Distinguished Fellow at the Georgetown Law Institute for Technology Law & Policy and a Benton Foundation Senior Fellow & Public Advocate said, "Given incontrovertible evidence of higher prices and reduced competition, Assistant Attorney General Makan Delrahim should have blocked this merger. Despite the fact that the promises of the combined companies are speculative, unenforceable and not merger-specific, he chose instead to bow to political pressure from FCC Chairman Pai and White House advisors to allow the wireless industry to further consolidate from 4 to 3, with the hazy hope that a handful of divestitures and behavioral conditions could one day result in a viable fourth national mobile wireless carrier. The state AGs who sued to block the merger shouldn’t be fooled by this weak attempt to maintain competition in the mobile wireless market. It’s mind-boggling that two of the most vociferous critics of behavioral conditions for media and telecommunications mergers, AAG Delrahim and Chairman Pai, would suddenly so heartily embrace them here, and that a Republican Justice Department would suddenly engage in the exactly the kind of centralized industrial policy engineering it so despises in order to create this so-called fourth competitor. A new mobile wireless entrant that starts with zero postpaid subscribers and that must rely on its much bigger rival, the new T-Mobile, just to operate is not a competitor. It’s a mobile Frankenstein."

"Consummation of this revised transaction has more obstacles than many observers seem to recognize," said Benton Foundation's Andrew Schwartzman. "For one thing, even though a majority of the FCC has signaled its approval, the Commission must still issue its decision. The expected dissents from the FCC minority will provide more ammunition for opponents. Second, the new consent decree must also be approved by a federal judge. While that review has often been automatic in the past, this time the states and other opponents have already marshaled." 

"Justice Department antitrust chief Makan Delrahim is trying to split the baby here by orchestrating a divestiture of Boost — a prepaid brand with no cellular network — to DISH, a satellite-TV company with no wireless customers, and a well-earned reputation for hoarding spectrum," said Free Press Research Director S. Derek Turner. "In truth, this arrangement wouldn’t offer cellphone users a viable fourth competitor in the wireless market. DISH has a troubling history when it comes to delivering wireless services, and it continues to squat on valuable spectrum, a delay that’s earned DISH considerable criticism from both inside and outside the FCC, including from T-Mobile itself before this newly engineered marriage of convenience."

"It is clear that the Justice Department agrees with what we’ve said for the past year: the wireless market needs at least four viable competitors. But the agency’s response is needlessly convoluted. DOJ does not need to bend over backwards to fix a bad merger. It can simply block the deal," said Joshua Stager, senior counsel at New America’s Open Technology Institute. 

George Slover, senior policy counsel for Consumer Reports, said, "The reported deal would eliminate Sprint, an established competitor in the wireless marketplace, and replace it with DISH, an unproven newcomer that has no experience in building its own wireless network, which it will need to build essentially from scratch. The deal reportedly gives DISH some of the building blocks it will need to make a go of it. But it could take years for DISH to get to the point where Sprint is now -- if it ever gets there. They are trading a bird in the hand for a pig in a poke."

"The bad news is that rather than simply reject the deal, the DOJ proposes a risky bet on creating a new facilities-based competitor," said Phillip Berenbroick, Policy Director at Public Knowledge. "This creates significant potential that consumers will be left with a substantially less competitive marketplace with higher prices, lower service quality, and less innovation. As we understand at this time, the consent decree includes extensive behavioral conditions on T-Mobile to facilitate Dish’s entry into the wireless market. We remain concerned, as with any behavioral conditions, there is considerable risk that these conditions will be ineffective or unenforced, leaving consumers to bear the costs."

Michael Copps, former FCC Commissioner and Common Cause Special Advisor, said, "Despite the addition of Dish, this is still a four-to-three merger where Verizon, AT&T, and a post-transaction T-Mobile will call all of the shots. Consumers can expect to see higher prices, fewer choices, and less innovative offerings across the board. Low-income and marginalized communities who rely on prepaid services from T-Mobile and Sprint will face significant consequences and potentially get priced out of wireless service. Our democracy functions best when all Americans have access to robust and affordable broadband services. There are no benefits to a three-firm marketplace that can price out millions of low-income customers and widen the digital divide. Fortunately, fourteen state attorneys general have filed a lawsuit to block this merger. We look forward to supporting their legal effort and continuing to mobilize opposition against this merger, which poses a significant danger to our democracy.”

Chip Pickering, CEO of INCOMPAS, which has opposed the merger, announced his support for the new DOJ approach: “Makan Delrahim and the Department of Justice Antitrust Division have upheld the competition and consumer welfare standard. The DOJ agreement is great news for wireless customers, smaller providers and fiber builders. This settlement preserves a market structure of four national carriers, unleashes a true race to new 5G and will help rural broadband grow. The DOJ deal is both creative and competitive. With the adoption of eSIM technology as a merger condition, consumers get greater portability and flexibility to switch providers. By empowering DISH, the DOJ preserves a fourth national provider that will benefit consumers and open up more wholesale opportunities for smaller wireless builders. DISH is a disrupter with a long history of providing service to underserved rural Americans and is well positioned to bring more competition to more communities. Makan is to be commended and congratulated for his commitment to the law and competition."