Sprint-T-Mobile Merger Faces New Hurdle With Lawsuit by States

A group of attorneys general from 10 states filed a federal lawsuit in a bid to block a proposed merger between the wireless carriers T-Mobile and Sprint, a $26 billion deal that has yet to receive the Justice Department’s approval. The lawsuit, led by Letitia James of New York and Xavier Becerra of California, contends that competition will suffer and consumer prices will rise if the companies combine. Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia and Wisconsin joined the complaint, which was filed in Federal District Court in Manhattan. The 10 attorneys general argue that a combined T-Mobile/Sprint would have incentive to raise prices and reduce service quality if they’re allowed to merge. While the two companies long have said that their combination would help them deploy next-generation wireless services, known as 5G, the states questioned if the two carriers could actually live up to their commitments to deliver better mobile broadband nationwide.

"Direct competition between Sprint and T-Mobile has led to lower prices, higher quality service, and more features for consumers,” they wrote in their complaint. "The cumulative effect of this merger, therefore, will be to decrease competition in the retail mobile wireless telecommunications services market and increase prices that consumers pay for mobile wireless telecommunications services.”

“The record is clear that it will lead to higher prices and less competition and that the companies’ promises are speculative, not merger-specific and unenforceable,” said Gigi Sohn, a distinguished fellow at the Georgetown Law Institute for Technology Law & Policy.