Josh Kaul
Press Release

Wisconsin Joins Multi-State Coalition to Block T-Mobile and Sprint Megamerger

States allege merger is anticompetitive and will drive-up prices for consumers throughout the country

By - Jun 11th, 2019 11:40 am

MADISON, Wis. – Wisconsin Attorney General Josh Kaul joined 8 states and the District of Columbia today in filing a multi-state lawsuit to halt the proposed merger of telecom giants T-Mobile and Sprint. The complaint, filed in New York federal court in coordination with California, Colorado, Connecticut, Maryland, Michigan, Mississippi, New York, Virginia, and Washington, D.C., alleges that the merger of two of the four national mobile network operators would deprive consumers of the benefits of competition and drive up prices for cellphone services.

“Maintaining strong competition helps keep prices low,” said Wisconsin Attorney General Josh Kaul. “If this proposed merger happens, many Wisconsinites will see increased prices for their cell-phone plans.”

T-Mobile US Inc. and Sprint Corp. are the third and fourth largest mobile wireless networks in the U.S., respectively, and are the lower-cost carriers among the “Big Four.” Verizon Wireless and AT&T — the two largest wireless networks — round out the market. Intense competition, spurred in particular by T-Mobile and Sprint, has meant declining prices, increased coverage, and better quality for all mobile phone subscribers. Since 2009, the average cost of mobile service has fallen by roughly 28 percent, according to the Labor Department, while mobile data consumption has grown rapidly. But the merger would put an end to that fierce competition, which has delivered so many benefits to consumers.

Currently, the average U.S. household spends approximately $1,100 annually on cellphone services. And for many families, especially those with lower incomes, even a small price increase can result in suspension or cancellation of cellphone service.

While T-Mobile and Sprint have made promises that their merger would offer lightning-fast speeds and increased capacity, the Attorneys General investigation found that many of the claimed benefits were unverifiable and could only be delivered years into the future, if ever. By contrast, if the merger were to go through, the combined company would immediately have the power and incentive to raise prices, while cutting quality. In short, any theoretical efficiencies that could be realized from the merger would be outweighed by the transaction’s immediate harm to competition and consumers.

Additionally, the merger would harm thousands of hard-working mobile wireless independent dealers across the nation. The nine states and DC are concerned that further consolidation at the carrier level would lead to a substantial loss of retail jobs, as well as lower pay for these workers in the near future.

Before filing suit, the states gave significant consideration to T-Mobile and Sprint’s claims of increased coverage in rural areas. However, T-Mobile has yet to provide plans to build any new cell sites in areas that would not otherwise be served by either T-Mobile or Sprint. And, as stated in the complaint, the U.S. previously won the “race to LTE” as a direct result of vigorous competition among wireless carriers. Finally, continued competition, not concentration, is most likely to spur rapid development of a nationwide 5G network and other innovations.

The complaint was filed in United States District Court for the Southern District of New York.

T-Mobile currently has more than 79 million subscribers and is a majority-owned subsidiary of Deutsche Telekom AG. Sprint Corp. currently has more than 54 million subscribers, and is a majority-owned subsidiary of SoftBank Group Corp.

Mentioned in This Press Release

People:

Recent Press Releases by Josh Kaul

Attorney General Kaul Joins 49 Attorneys General in Google Multistate Bipartisan Antitrust Investigation

“We must ensure that competition over technological innovation and privacy protections isn’t stifled.”

Guilty Verdicts in Two Violent Firearms Cases in Milwaukee County

“Vigorously prosecuting violent offenders like the defendants in these cases makes communities safer.”

First Conviction Issued After Testing of Backlogged Sexual Assault Kits

Leroy Whittenberger is a serial sexual offender and has three prior sexual assault convictions from Lincoln and Marathon counties.

Leave a Reply

You must be an Urban Milwaukee member to leave a comment. Membership, which includes a host of perks, including an ad-free website, tickets to marquee events like Summerfest, the Wisconsin State Fair and the Florentine Opera, a better photo browser and access to members-only, behind-the-scenes tours, starts at $9/month. Learn more.

Join now and cancel anytime.

If you are an existing member, sign-in to leave a comment.

Have questions? Need to report an error? Contact Us