Democratic Presidential Candidates Try to Block T-Mobile-Sprint Deal

Eight Democratic senators, most of them presidential candidates or hopefuls, have called on the FCC and Justice Department to block the merger of T-Mobile and Sprint.

Signing on to the letters to the FCC and DOJ to that effect were Sens. Richard Blumenthal (Connecticut); Amy Klobuchar (Minnesota), Tom Udall (New Mexico), Sherrod Brown (Ohio), Kirsten Gillibrand (New York), Elizabeth Warren (Massachusetts), Bernie Sanders (Vermont), Cory Booker (New Jersey), and Ed Markey (Mass.).

The call comes the day before the first of two Hill oversight hearings on the deal.

"The company has proposed a four-to-three merger that is likely to raise prices for consumers, harm workers, stifle competition, exacerbate the digital divide, and undermine innovation," they wrote in the letters, which are essentially identical. "Blocking this proposed combination is necessary to send a strong signal that our enforcement officials are vigorously protecting Americans from harmful anticompetitive behavior."

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The companies argue that by combining the number three and four largest wireless carrier, they will create a stronger but still "uncarrier-like" competitor to AT&T and Verizon.

But the senators use language like "stifle," and "unacceptable" and "dangerously high" market concentration to describe a proposed merger they point out the Justice Department--under a Democratic Administration--discouraged only a few years ago.

As to a combined company following T-Mobile's maverick course, they say: "[T]here is reason to doubt that T-Mobile will remain dynamic if it swallows its closest competitor."

The senators also predict dramatic price hikes, and poke some fun at T-Mobile's argument that benefits will come from a "quality-adjusted price," i.e. they will be paying more for better. Even if that is true, said the senators, "consumers do not pay 'quality-adjusted' mobile phone bills, nor do they earn 'quality-adjusted paychecks."

T-Mobile has tried to foreclose that argument by pledging to the FCC to maintain legacy rate plans for three years. The senators counter that that is caveated with fine print if plans with more data are offered, which suggests to them even a minimal upgrade in performance could trigger price hikes. They said that even if the offer were made a deal condition, it would be so vague as to be unenforceable.

DOJ antitrust chief Makan Delrahim is on the record as saying such behavioral conditions are hard to enforce and not his preference for making what he sees as otherwise illegal mergers legal.

The senators say the deal would be bad for workers and consumers and does not offer enough to rural folks and could even hurt them.

They also argue that the companies' claim that the merger would enable them to speed the rollout of 5G in a way they could not do separately is off base and that both a have a "standalone" path to 5G that is not appreciably smoothed by joining forces.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.