A liberal-leaning think tank urged the Trump administration on Thursday to block T-Mobile’s $26.5 billion acquisition of Sprint, arguing that the merger would concentrate too much market share among just three telecommunications firms.
“A combined T-Mobile and Sprint means higher prices and worse service in wireless phone service,” Barry Lynn, executive director at the Open Markets Institute, wrote in a brief to the Federal Communications Commission. “This is true for the public at large, and especially true for rural and suburban communities.”
T-Mobile and Sprint, the third- and fourth-biggest U.S. carriers, respectively, have argued a merger is necessary to compete against larger rivals Verizon and AT&T.
Should the transaction gain approval, the resulting competitive landscape would “raise the already high barriers to new market entry in the wireless market,” according to the Open Market Institute — a group with a largely Democratic board of directors, including Missouri’s former Democratic Lieutenant Gov. Joe Maxwell.
T-Mobile continues to grow its customer base, while Sprint reported a drop in wireless subscribers in the third quarter. The firms — which both reported profits in the three months through September — are expecting their merger to close in the first quarter of 2019, pending regulatory approval.
Open Markets, along with nonprofit Public Knowledge, watchdog Common Cause, and the Consumers Union, highlighted the impact the merger could have on rural customers, specifically on the agreements the top carriers strike with smaller telecom providers to provide roaming, or service outside their home markets.
“Not only is roaming critical for new market entrants, but it is also vital for the continued survival of smaller, regional and rural wireless carriers, as well as rural fixed broadband providers,” the group wrote. “T-Mobile and Sprint’s current roaming partners that support the proposed transaction cannot verify that the combined firm will actually offer wholesale and roaming agreements.”
T-Mobile and Sprint previously pledged to invest billions to build out the infrastructure for its fifth-generation wireless network and argued the merger will help deploy the improved service more quickly.
Open Markets urged the FCC not to give credence to that argument, since both companies continue to move independently to roll out their own 5G offerings, which promise internet speeds currently only available through a hard-line connection.
