FCC faces pressure to block T-Mobile Sprint deal

Justice Department and Federal Communications Commission (FCC) are facing pressure to block a deal between T-Mobile US and Sprint.
T-Mobile and Sprint merger
A U.S. House panel is set to hold a hearing on the merger on Wednesday. Eight Democratic US senators and independent Senator Bernie Sanders have urged the FCC and DoJ to block the deal, Reuters reported.

T-Mobile US, owned by Deutsche Telekom of Germany, is the third largest telecom operator in the US. Sprint, owned by SoftBank of Japan, is the fourth largest telecom operator. AT&T and Verizon are the dominant telecom operators.

“The $26 billion merger is likely to increase prices for consumers, harm telecom jobs, stifle competition, exacerbate the digital divide, and undermine innovation,” they wrote in separate letters to FCC Chairman Ajit Pai and Makan Delrahim, the Justice Department’s top antitrust official.

The signatories included potential or confirmed presidential candidates Sanders, Amy Klobuchar, Sherrod Brown, Kirsten Gillibrand, Elizabeth Warren and Cory Booker. Also signing the letters were Senators Richard Blumenthal and Tom Udall.

The senators noted the four largest wireless carriers including AT&T and Verizon control 98 percent of the market.

“Antitrust regulators around the world have consistently blocked four-to-three mergers in the mobile and telecommunications industry, and those who have allowed such mergers have lived to regret it,” they wrote.

Separately, T-Mobile Chief Executive Officer John Legere defended the merger in written testimony released on Tuesday, ahead of a House Energy and Commerce Committee panel hearing on Wednesday.

He said the telecom operator company does not use Huawei or ZTE network equipment in any area of its network and will never use equipment from the Chinese firms in 5G network in the US.

US national security officials have said both ZTE and Huawei raise concerns. The Donald Trump administration is preparing an executive order to be released as soon as this month, that would allow the Commerce Department to bar U.S. companies from using telecom equipment made by Huawei, ZTE or other companies.

Legere said the merger would lead to lower prices and more US jobs. Opponents argue the combined entity would likely raise prices, cut costs and harm rural consumers.

Sprint Chairman Marcelo Claure will tell the panel that the combined firm’s improved network will be able to compete for customers who have been reluctant to use Sprint or T-Mobile because of concerns that the quality of their individual networks is not as good as those offered by Verizon or AT&T.

Sprint and T-Mobile announced the merger in April 2018 after their first round of merger talks ended in 2014 when President Barack Obama’s administration expressed antitrust concerns.