To literally no one’s surprise, the head of the Federal Communications Commission on Monday announced Monday that he’d recommend approving the merger of T-Mobile and Sprint. But it now looks as if the Justice Department’s own attorneys vehemently oppose the merger.
Reuters reported Wednesday that the DOJ’s antitrust division has recommended filing a lawsuit to block the $26.5 billion deal. Citing two sources familiar with the matter, the news agency said the division’s staff have long been “skeptical” of the proposed merger, in that it does not appear to be in the best interests of consumers.
Per Reuters: “T-Mobile has a reputation for aggressively seeking to cut prices and improve service to woo customers away from market leaders Verizon Communications Inc and AT&T Inc, and staff may want to preserve that dynamic.”
Ajit Pai, the FCC chairman, said earlier that commitments by T-Mobile and Sprint to close “the digital divide in rural America” and advance “United States leadership in 5G, the next generation in wireless connectivity,” has persuaded him to approve the deal.
FCC Commissioner Brendan Carr—only days after accepting an award from the nation’s largest wireless industry trade association—announced that he, too, was also swayed by the companies’ commitments and would support the chairman’s decision.
Praising his “ongoing leadership,” T-Mobile CEO John Legere thanked Pai for his support in a statement Monday, while promising the commitments T-Mobile agreed to are “verifiable, enforceable and specific.” But consumer advocacy groups and legal experts following the news disagreed entirely.
“Rather than actually examine the competitive impact, Chairman Pai’s recommended approval points to T-Mobile’s commitments and behavioral conditions,” said Yosef Getachew, media and democracy program director for Common Cause. “Not only are these commitments and conditions unenforceable and riddled with loopholes, they do nothing to address the blatant competitive harms the merger poses to consumers.”
Gigi Sohn, a counselor to former FCC Chairman Tom Wheeler, echoed those concerns in a Wired op-ed this week, writing that Legere’s assurances “are speculative, unsubstantiated, and entirely unenforceable.” Sohn went on to call T-Mobile’s vow not to raise prices for three years an “admission” that, should the merger be approved, “there would not be enough competition in the wireless market to constrain price increases.”
Pai’s announcement was also rebuked by, among others, New America’s Open Technology Institute and the Rural Wireless Association. FCC Commissioner Jessica Rosenworcel, who is Democrat, compared the merger to “consolidation in airlines and with drug companies,” which she argued, “hasn’t worked out well for consumers.”
“The inadequate conditions [Pai] and his fellow GOP commissioners so readily and rapidly blessed are a tiny Band-Aid on what would be a fatal wound to wireless competition and affordability in this country,” said Matt Wood, vice president of policy at the advocacy group Free Press. “DOJ’s staff seems to get that, even if some of the political appointees leading the FCC don’t.”