The suggestion that T-Mobile and Sprint may merge is one that has surfaced for quite some time. However the belief in such an outcome took on significantly more importance recently when a report emerged suggesting a deal was likely to take place. Since then multiple other reports have come through adding weight to the idea and very recently a report came though suggesting that not only is the deal incoming, but the final details are being ‘ironed out’ and an announcement could be made with a matter of weeks.
Due to this, and the seemingly inevitability of an incoming announcement, a number of U.S. senators have now jointly written a letter requesting the FCC and the DOJ to investigate the impact of a T-Mobile and Sprint merger. Although the letter authored by U.S. Senator Amy Klobuchar (D-MN) and signed by another 7 senators comes before a deal has been announced, the letter suggests that the speculation surrounding the likelihood of an announced deal, coupled with the potential impact of such a deal, is enough to justify the FCC and the DOJ start an investigation into the effects of the possible merger now. Suggesting that the impact of a merger of this caliber “could raise significant antitrust issues and could harm consumers.”
The letter goes on to add that by starting the investigation now this will allow the FCC and the DOJ to act more swiftly once an announcement is made, if and when one is. The letter also points out that some of the senators’ concerns over this merger is that consolidating the wireless market further will directly impact on some of the positive changes that have been seen recently. With the senators specifically noting how “competition among four major cell phone carriers has benefited consumers with lower prices, better service, and more innovation.” While further suggesting that this could lead to increased prices which would further impact specifically on low-income customers, or cause some to have to opt out of access to the internet in general. With the letter stating that “neither outcome is acceptable.” The letter highlights this point succinctly by noting how T-Mobile and Sprint are considered to be direct competitors within the market and therefore there are some additional add-on anti-competitive aspects in play here. Drawing on examples of how both companies have become leaders in the prepaid market, and pioneered ‘no credit check’ plans. Examples of innovation at the lower end of the market which might not continue as a result of a ‘horizontal merger’ such as this. The link below will assist those interested in reading the request in its entirety.