Attorneys for the 13 states and the District of Columbia will
argue in Manhattan federal court that a plan to combine the No.
3 and No. 4 wireless carriers would push up prices, particularly
for users of prepaid plans. The state officials, all Democrats,
asked Judge Victor Marrero to order the companies to abandon the
The companies argue that the stronger T-Mobile that would result
from the proposed $26.5 billion takeover would be better able to
innovate and compete to push down wireless prices.
The case represents a break with the usual process of states
coordinating with the federal government in reviewing mergers,
and generally coming to a joint conclusion.
This deal had been contemplated in 2014 during the Democratic
Obama administration but enforcers at the Justice Department and
Federal Communications Commission urged the companies to drop
the idea, which they did.
Fast forward to 2019, and the Republican Trump administration
signed off on the planned merger after the companies agreed to
sell Sprint's prepaid businesses popular with people with poor
credit to satellite television company Dish Network Corp.
T-Mobile CEO John Legere, who steps down in April, last month
acknowledged talks with Sprint to extend the merger agreement
and did not rule out lowering the $26.5 billion price that was
originally agreed upon.
The states argue the merger would leave just three nationwide
wireless carriers, Verizon Communications, AT&T and the new
T-Mobile, which could lead to higher prices.
"These higher prices would fall hardest on the credit-challenged
and low-income consumers who have benefited the most from the
competition between Sprint and T-Mobile," they said in a court
Setting up satellite company DISH as a wireless carrier is
"patently insufficient to mitigate the merger's competitive
harm," they argued in a court filing.
In a pretrial filing by the companies, they said the stronger,
merged firm will be better positioned to compete with AT&T and
Verizon as the world moves to the next generation of wireless,
"Prices will go down, not up, as a result of the merger," the
companies argued in their filing, saying the deal would create
$40 billion in efficiencies.
(Reporting by Diane Bartz; Editing by Daniel Wallis)
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