US states filed a legal complaint to prevent T-Mobile merger with Sprint Corp

On Tuesday, ten US states, led by New York and California, filed a case against the merger of T-Mobile and Sprint Corp. The complaint was raised to stop $26 billion purchase of Sprint Corp by T-Mobile. If the deal gets through, it would have more than 127 million customers and become the third-largest wireless player in the country.

The deal was opposed for the merger would reduce the number of nationwide wireless carriers from four to three. It would eventually shoot up consumer prices due to reduced competition. Some believe that if US’s top 3 (T-mobile) and top 4 (Sprint) wireless carriers would combine, it would be devastating for the industry, as it would provide excessive control of the prepaid wireless market to a single carrier.

The US government’s objections to the merger between Sprint and T-Mobile started to fade as Federal Communications Commission Chairman Ajit Pai and Commissioner Brendan Carr both showed support for the merger. On Monday FCC chairman Ajit Pai said that he plans to recommend the merger after the two companies agreed to a set of concessions.The merger got a go ahead from FCC with the hope that it would to roll out extensive 5G network, ‘closing the digital divide in rural America and advancing US leadership in 5G. US President Donald Trump is also a propagator of effective use and access to technology, as it is crucial to national security.

The merger got stalled as the complaint got filed in the US District Court for the Southern District of New York, on Tuesday.

All-Democratic attorneys general from the 10 states, including Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia and Wisconsin, gave together to warn that deflated competition would cost Sprint and T-Mobile subscribers more than $4.5 billion annually.

“When it comes to corporate power, bigger is not always better,” New York Attorney General Letitia James said at a news conference.

“This is the third time T-Mobile has tried to merge and shrink the market to three players,” said California Attorney General Xavier Becerra.

“Every time they’ve tried they’ve been blocked or forced to walk away because of opposition from the government… Opposition that’s based on the same concerns laid out in our lawsuit today.”

 

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