Free Press: The T-Mobile/Sprint Merger Would Undermine Competition, Increase Costs and Make Internet Access Unaffordable to Far Too Many

WASHINGTON — On Wednesday, Free Press filed the latest document in its ongoing opposition to the proposed $26.5-billion merger between T-Mobile and Sprint. In the Federal Communications Commission filing, Free Press explains that the deal’s harms to competition would be most acutely felt by subscribers who rely on lower-priced wireless options, noting that people of color are heavily represented in that demographic.

The two companies have failed to demonstrate that combining two competitors would serve the public interest in any way, Free Press wrote in its filing (redacted version available here).  

“This merger would diminish that competition and reverse many of the consumer benefits that resulted from the U.S. Government’s 2011 rejection of the proposed AT&T/T-Mobile merger,“ the Free Press filing reads. “A relatively higher degree of competition in the wireless marketplace has helped create more good options for wireless users, as well as more robust mobile broadband markets for resellers, which have driven prices lower for people in [low-income] communities.”

An earlier Free Press filing made the case that the transaction would massively increase concentration in an already highly concentrated market. The loss of options would hurt all wireless users, but especially people of color, lower-income consumers and other price-sensitive and value-seeking subscribers that T-Mobile and Sprint serve.

Thursday’s Free Press filing shows conclusively that T-Mobile and Sprint are each other’s closest competitors. They compete with one another by offering not only more valuable data plans but prices that are lower than AT&T’s and Verizon’s.

Free Press Research Director S. Derek Turner made the following statement:

“The T-Mobile and Sprint deal would eliminate a key competitor in a wireless marketplace that’s been trending in the right direction for the last several years. That trend is due to the competitive moves and countermoves T-Mobile and Sprint have made while competing for customers. The two companies have also taken market share from Verizon and AT&T while eating into those two largest carriers’ enormous profits.

“T-Mobile and Sprint place their retail stores in densely populated areas — locations that serve the middle- and low-income populations Verizon and AT&T tend to ignore. If this merger goes through, people in these areas would be hit hardest.

“And while T-Mobile and Sprint executives like to exaggerate this deal’s so-called efficiencies, they’ve paid very little attention to the high cost it would exact on people in the United States who struggle to stay connected.

“The better path for all would be to keep these wireless competitors intact. As both companies have explained time and again, they’re already building their own 5G networks. They’re already pressuring AT&T and Verizon to lower prices, making access affordable to more people. And they’re already offering services in communities that the larger carriers frequently ignore. Why exchange these benefits for a deal that enriches a few greedy executives while taking choices away from low-income families and communities of color?

“Regulators need to put aside the pro-merger propaganda and CNBC spin and pay attention to the real harms that result when you remove competitors from the marketplace. Any clear-eyed analysis of this deal arrives at one indisputable conclusion: The FCC and Justice Department must reject the T-Mobile/Sprint merger.”