Can the Sprint and T-Mobile Merger Pass the Senates Antitrust Questioning?

by: The Knowledge Group

May 29, 2018


A U.S. Senate subcommittee on antitrust, competition, and consumer rights will soon hold a hearing on proposed $26.5 billion merger between Sprint Corp. and T-Mobile US.

Whether the proposed merger between T-Mobile and Sprint benefits consumers in accordance with antitrust law will be the question of the day on June 27.

This is not the only hoop the two companies must jump through. Both Sprint and T-Mobile have foreign investors. Before a merger occurs, the U.S. Committee on Foreign Investment needs to sign off.

T-Mobile CEO John Legere and Sprint CEO Marcelo Claure have had high-profile meetings with both the Justice Department and the Federal Communications Commission, whose green lights they will also require.

Ramifications for Consumers

Wireless communications underlie our workplace and social interactions, and are often a safety necessity. We constantly depend on cellular data to navigate our businesses and our personal lives.

Cellular data isn’t cheap. Fortunately, though, we have four major companies competing to offer us the best possible service and deals: Sprint, T-Mobile, Verizon Communications, and AT&T. Today, thanks to competition, we can get unlimited talk and text features, and cellular data costs have dropped.

The status quo, in short, has worked well for consumers.

In 2014, an earlier attempt to merge Sprint and T-Mobile failed to satisfy the antitrust concerns of the Justice Department and the FCC. Three years prior to that, regulators’ disapproval forced AT&T to withdraw a $39 billion bid for T-Mobile. The Justice Department and FCC regarded T-Mobile as a maverick company that prompted bigger corporations to keep their services customer-friendly and affordable. Regulators wanted to see these four key players—not three—continue to innovate.

Sprint and T-Mobile Want a Done Deal in 2019

Should their merger go through in the year ahead, T-Mobile and Sprint will mesh their customer bases to create an entity bigger than either Verizon or AT&T, the current top players.

Given the Trump administration’s opposition to AT&T’s bid to take over Time Warner, will antitrust enforcement in the Trump era be consistent here? We’ll soon see.

We will be discussing the latest Antitrust merger enforcement under the Trump Administration on a live webcast, eligible for Continuing Legal Education (CLE) webcast.  We hope you can join us on June 7, but this event will be made available as a recording should you be unable to make it, all of the details can be found by clicking here.