The U.S. Department of Justice has reached an agreement that will formally allow a merger between the nation’s third and fourth largest cell phone service carriers.
The agreement takes the proposed merger between T-Mobile and Sprint out of “regulatory limbo,” however challenges remain for the planned union. While the DOJ is giving the green light, the companies can still be challenged in court on anti-trust concerns. 13 state attorney generals have filed lawsuits to stop the merger, including those in California, New York, Ohio, Nebraska, and the District of Columbia.
Attorney generals in states attempting to block the merger contend that the move would severely harm competition, citing that there will be only three large carriers in the country for consumers to choose from. Analysts who agree with the assessment contend that the merger will allow these large corporations to raise prices on their services with little to no challenge in the market.
These concerns were the chief reason why the DOJ took as long as it did to give its approval.
“Americans’ access to fast, reliable and affordable wireless connectivity is critically important to our economy and to every American consumer and to their way of life,” the head of the DOJ’s anti-trust division said.
As part of the agreement, Dish Network will pay $5 billion for divested assets from both T-Mobile and Sprint, including Sprint’s Boost Mobile and Virgin Mobile. It will also be allowed to access the new company’s network for seven years.
To be sure, this is a pretty large-scale merger, so anti-trust lawsuits should come as no surprise. But, is this really a concern for consumers? Or, will a larger T-Mobile actually balance the market currently dominated by Verizon and AT&T?
Here’s Leo Laporte on why he isn’t necessarily against the deal.
Regards,
Ethan Warrick
Editor
Wealth Authority
