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10 State Attorneys General Sue To Block T-Mobile, Sprint Merger

Ten state attorneys general are suing T-Mobile and Sprint to try to block their merger.

Ten state attorneys general have filed a lawsuit to try to block the merger of telecom giants T-Mobile and Sprint.

"When it comes to corporate power, bigger isn't always better," New York Attorney General Letitia James said in a statement. "The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country."

James is leading the lawsuit along with California Attorney General Xavier Becerra. They filed the lawsuit against T-Mobile, Sprint and their controlling shareholder companies in federal court in the Southern District of New York on Tuesday. The attorneys general of Colorado, Connecticut, Maryland, Michigan, Mississippi, Virginia, Wisconsin and Washington, D.C., have also signed on to the lawsuit.

The companies did not immediately respond to NPR's request for comment about the lawsuit.

The proposed merger, which has been in the works for years, would reduce the number of major U.S. wireless telecom providers from four to three (including AT&T and Verizon).

Last month, Federal Communications Commission Chairman Ajit Pai said he endorsed the union after the two companies agreed to a set of concessions. T-Mobile and Sprint agreed not to raise prices for three years, to improve their broadband service, particularly in rural areas, and to speed up the deployment of a 5G mobile network that would cover the vast majority of the United States. The companies also agreed to sell the prepaid brand Boost Mobile.

The concessions also included penalties if they failed to follow through.

While Pai has blessed the merger, it has not yet formally been approved by the FCC. The Justice Department's antitrust division is also still reviewing the deal.

T-Mobile and Sprint have previously argued that combining would allow them to innovate in ways that would benefit consumers.

But the state attorneys general say they have doubts. "This merger would hurt the most vulnerable Californians and result in a compressed market with fewer choices and higher prices," Becerra said in a statement. The attorneys general said that the companies have yet to "provide plans to build any new cell sites in areas that would not otherwise be served by either T-Mobile or Sprint."

In the complaint, the plaintiffs argue that competition between Sprint and T-Mobile has "led to lower prices, higher quality service, and more features for consumers." If they merge, the complaint states, it would be a disincentive to innovate.

It's worth noting that not all experts agree that the merger would eventually lead to higher prices. Last month, Roger Entner, the founder of telecom insight firm Recon Analytics, said that "I don't think it will make a significant difference in prices going forward."

Copyright 2019 NPR. To see more, visit https://www.npr.org.

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