US Government, Sprint Sue to Block AT&T/T-Mobile Merger

In the US wireless market, AT&T is currently attempting to buy T-Mobile to create one heck of a behemoth wireless provider. While earlier this week the US government already filed a lawsuit to block the merger, citing antitrust concerns, US carrier Sprint has now also filed a lawsuit to block the merger.

The US government lawsuit was filed by the country’s Department of Justice, citing concerns about consumer choice and antitrust. “The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services,” said deputy attorney general James M. Cole, “Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation’s wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition.”

The DoJ notes that of the four nationwide wireless carriers in the US market, T-Mobile provides services at aggressive pricing, which benefits consumers in the entire country. On top of that, the DoJ calls T-Mobile a source of innovation, with the first high-speed wireless data network. The merger would hinder both of these strengths.

Not entirely unexpected, Sprint followed, uh, suit. Sprint would remain as the last independent nationwide carrier in the US, far behind AT&T/T-Mobile and Verizon. If the merger is allowed to go through, Sprint could potentially be one of the first victims as it falls by the wayside.

Sprint basically cites the exact same reasons as the DoJ, and they’re honest about their big fat self-interest in this case. “The proposed takeover would harm Sprint and the other independent wireless carriers,” the company states, “If the transaction were to be allowed, a combined AT&T and T-Mobile would have the ability to use its control over backhaul, roaming and spectrum, and its increased market position to exclude competitors, raise their costs, restrict their access to handsets, damage their businesses and ultimately to lessen competition.”

From a Dutch perspective, I find it amazing that the large American wireless market only has four nationwide players. In a small country like The Netherlands (one third the size of Ohio), the three carriers we have is already far too few to ensure competition, so how on earth does a huge market like the US cope? I’m sure the immense size of the country plays a large role in the lack of nationwide carriers, but still – it doesn’t look healthy to me to have only four.

Let alone three. I know too little of US antitrust law to determine how much weight these lawsuits carry, but they do seem like common sense to me. Any Americans in the room who could provide better insight into this?


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