Senate Democrats urge regulators to put kibosh on T-Mobile, Sprint merger

The $26 billion merger would reduce the number of nationwide wireless players from four to three.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
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Nine Democrats in the Senate, including a few presidential hopefuls, sent letters Tuesday to the Department of Justice and Federal Communications Commission asking the agencies to reject T-Mobile's proposed $26 billion deal to buy Sprint .

The letters addressed to Makan Delrahim, head of the Justice Department's antitrust division, and FCC Chairman Ajit Pai urge the regulators to put the brakes on the merger. The senators said the merger is "likely to raise prices for consumers, harm workers, stifle competition, exacerbate the digital divide, and undermine innovation."

Presidential candidates Sens. Amy Klobuchar of Minnesota, Kirsten Gillibrand of New York, Elizabeth Warren of Massachusetts, and Cory Booker of New Jersey are among those who signed the letters. Sens. Sherrod Brown of Ohio and Bernie Sanders of Vermont, who are expected to launch their presidential bids soon, also signed on.

If approved, the merger, announced in April, would reduce the number of national wireless carriers in the US from four to three. In 2011, the FCC and Justice Department rejected AT&T's acquisition of T-Mobile, saying the reduction in competition would harm consumers. The senators echoed that sentiment Tuesday.

"Antitrust regulators around the world have consistently blocked four-to-three mergers in the mobile and telecommunications industry, and those who have allowed such mergers have lived to regret it," they wrote in their letter to Pai.

T-Mobile didn't immediately respond to a request for comment. Sprint said it had no comment. 

The letters come the day before T-Mobile CEO John Legere, and Sprint Executive Chairman Marcelo Claure are set to testify before the House Energy and Commerce Committee on the merger. The House Judiciary Committee will hold a separate hearing on the merger on Thursday, where the executives are also expected to testify.

In his prepared testimony for the House Commerce Committee hearing published Tuesday, Legere defended the merger, saying the transaction is necessary to ensure US dominance in 5G wireless networks. He also plans to say the combined T-Mobile would be better able to compete with rivals AT&T and Verizon and to provide an alternative broadband service to what's offered by cable providers.

"Our proposed merger with Sprint will provide the New T-Mobile with the added scale and critical spectrum and network assets to supercharge our 'Un-carrier' philosophy," he said in the testimony. He said this will allow T-Mobile to take competition to "new levels."

"We will offer a much faster, broader, and deeper network and new services at lower prices."

He also made it clear that the company does not now and will not in the future have any dealings with Chinese network equipment maker Huawei or ZTE. Some security experts have noted concern that Huawei's relationship with Deutsche Telekom, which owns a stake in T-Mobile, and its involvement with Softbank, which owns Sprint, could pose a national security threat.

Claure in his testimony plans to tell the panel that the combined company's improved network "will be able to compete for customers who have been reluctant to use Sprint or T-Mobile because of concerns that the quality of their individual networks is not as good as those offered by Verizon or AT&T."

Several of the Democrats who sent the letters asked last month for Republican leaders on the Senate Commerce Committee to hold a hearing on the deal. The Senate Judiciary Committee held a hearing on the deal in June. While lawmakers don't have a say in whether a deal is approved or rejected, they can exert political pressure on the agencies that do make that determination. 

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