State Attorneys General Sue To Block T-Mobile, Sprint Merger

A T Mobile and Sprint store sit side-by-side in a strip mall

A T Mobile and Sprint store sit side-by-side in a strip mall

T-Mobile and Sprint's merger may have hit another government snag. The lawsuit was filed in U.S. District Court in ny.

"They see the FCC accepting certain remedies and concessions that don't, in their minds, solve the problem", she said.

Other attorneys general joining Tuesday's lawsuit are from Connecticut, Colorado, the District of Columbia, Maryland, Michigan, Mississippi, Virginia and Wisconsin.

"As the eighth largest mobile wireless consumer market in the United States, we must protect MI residents - and every cell phone customer in the country - from a move by corporate players that will enrich their shareholders on the backs of their customers".

It represents another hurdle for T-Mobile and Sprint, whose $26.5 billion merger is still under consideration by USA regulatory bodies.

House Democrats, led by freshman congresswoman Rashida Tlaib of MI, followed suit shortly thereafter by sending a similar letter to Pai and Department of Justice head Makan Delrahim outlining their opposition to the deal, stressing how it would "disproportionately hurt lower-income people and communities of color".

As of March, T-Mobile and Sprint had a combined 1,556,042 telephone lines in Colorado, or roughly 1.5 million customers.

Amanda Wait, an antitrust lawyer and former Federal Trade Commission lawyer, said states could be suing if they expect the Justice Department to come to a different conclusion than they have reached.

It's an unusual step ahead of a decision by federal antitrust authorities.

While AT&T and Verizon dominate the overall USA wireless market, T-Mobile is the most popular among customers who make less than $75,000 per year, and Sprint's Boost Mobile prepaid brand counts 83 percent of its users in that income range, according to Kagan, S&P Global Market Intelligence data. It's an assessment several Wall Street analysts have agreed with. And, as stated in the complaint, the USA previously won the "race to LTE" as a direct result of vigorous competition among wireless carriers.

The two companies previously tried to combine during the Obama administration but regulators rebuffed them.

T-Mobile has a reputation for consumer-friendly changes to the cellphone industry. And they say that the companies don't need to combine in order for 5G service to roll out in the USA, noting that Sprint has already launched a 5G network in parts of several cities and T-Mobile has separately been working to deploy 5G. And if the deal closes, T-Mobile and Sprint have promised the FCC that it will sell off Sprint's Boost Mobile pre-paid unit. As yet, the FCC has not formally approved the deal: the watchdog's chairman, Ajit Pai, only put out a statement indicating that he would put it forward for a vote and vote in favor.

Regulators have yet to sign off on the deal. Consumer advocacy groups have voiced their disagreement with the deal. Staff attorneys at DOJ have reportedly told the companies they won't approve the deal as proposed, but the ultimate decision lies with Makan Delrahim, the top antitrust official who is a political appointee.

T-Mobile now has more than 79 million subscribers and is a majority-owned subsidiary of Deutsche Telekom AG.

T-Mobile and Sprint have a deadline of July 29 to complete their merger.

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