Critics of the $26 billion T-Mobile-Sprint merger are pushing House Democrats to take a closer look at the mega-deal when they take control of the lower chamber in the new Congress.
Concerned about the lack of attention the merger has gotten from Republican leadership, a coalition of consumer and labor groups sent a letter to top Democrats on Wednesday asking them to hold hearings on the deal early next year.
{mosads}“This is the largest telecom merger before the regulatory agencies,” said Debbie Goldman, the director of telecommunications policy at the Communications Workers of America (CWA). “It affects hundreds of millions of U.S. wireless subscribers.”
Among those joining CWA in signing the letter were Public Knowledge, the Open Markets Institute, Consumer Reports and Common Cause.
The deal would combine two of the four major wireless carriers in the U.S.
Opponents worry that such a major tie-up in an already heavily concentrated market would reduce competition and lead to higher prices for consumers, especially those that rely on telecom companies’ prepaid subsidiaries.
And labor groups like CWA are predicting that as many as 30,000 workers will lose their jobs as a result of the merger.
T-Mobile and Sprint, meanwhile, are arguing that the deal would allow them to better compete with the larger carriers, Verizon and AT&T, as the industry rolls out their fifth-generation (5G) wireless networks.
“The network will produce fiber-like speeds that enable innovative mobile wireless uses; unleash an alternative to in-home, fixed broadband providers; enable disruptive video services; spark more competition for enterprise; bring better service to rural America, including high-speed broadband; create thousands of additional American jobs; and achieve accelerated 5G deployment in the United States,” the two companies wrote in a filing to the Federal Communications Commission (FCC) in September.
It’s still unclear which argument is more persuasive to regulators. Both the FCC and the Department of Justice needs to sign off on the merger in order for it to clear.
The top officials at those agencies under the Obama administration discouraged the idea of the two companies merging when it was floated in 2014 over concerns about what the increased consolidation would lead to.
Bill Baer, the head of the Justice Department’s antitrust division at the time, and former FCC Chairman Tom Wheeler wrote in a joint op-ed for CNBC last year that the merger would undo a lot of the competitive offerings that came as a result of Verizon and AT&T having to compete with the two smaller carriers.
“Things got so intense that Sprint’s owners — SoftBank — approached the two of us a couple of years ago to argue that they should be allowed to buy T-Mobile,” Baer and Wheeler wrote. “The idea of eliminating a pesky rival may have made sense for Sprint. But not for the American consumer. We made that clear, and Sprint reluctantly ditched the idea.”
Now, with President Trump in the White House and many regulators seeing the 5G rollout as a top economic and national security issue, T-Mobile and Sprint are hoping to increase their chances this time around with a pitch tailored to the administration’s priorities.
Opponents aren’t buying it, and they’ve been frustrated by a lack of interest from the Republican-led Congress in bringing attention to the issue.
“There’s been a great deal of dispute over what the actual facts are regarding the impact of this transaction, and a congressional hearing would bring those facts to light,” Goldman said.
Executives for T-Mobile and Sprint testified on the merger before a Senate Judiciary subcommittee in June, but the House has yet to hold a hearing despite efforts from top Democrats.
In April, Rep. Frank Pallone Jr. (D-N.J.), the top Democrat on the House Energy and Commerce Committee, asked Republicans to hold a hearing on the merger out of concern about its possible effects, but nothing ever materialized.
Now that Pallone is a likely candidate to become Commerce chairman, merger critics are pushing him to make a hearing a priority for early next year.
“Announcing hearings to examine the single largest pending wireless telecommunications merger, and one of the largest in the nation’s history, would be an excellent first step to implementing your vision for stronger antitrust enforcement, protecting consumers, promoting competition, and standing up for American workers,” the groups wrote to Pallone.
They also sent a letter to Rep. Jerrold Nadler (D-N.Y.), who’s in line to take over the House Judiciary Committee.
Spokespeople for T-Mobile and Sprint did not immediately respond when asked for comment.