WASHINGTON — Executives from T-Mobile US Inc and Sprint Corp faced tough questions from lawmakers on Wednesday about how the companies’ planned merger would affect prices and jobs, especially in rural America.
The deal to combine the No. 3 and No. 4 U.S. wireless carriers, struck in April, was approved by both companies’ shareholders in October and has received national security clearance. But the agreement still needs approval from the Department of Justice and the Federal Communications Commission.
Rep. Mike Doyle, who chairs the House of Representatives Energy and Commerce Committee panel holding the hearing, raised worries about the deal because the U.S. wireless market has just four main carriers. The industry leaders are AT&T and Verizon Communications.
“It’s hard to think of one (deal) where consolidation did not result in people losing their jobs, prices going up and innovation being stifled,” Doyle said.
Rep. Billy Long, a Republican, expressed concern about lost jobs in his Missouri district.
Iowa’s Rep. Dave Loebsack, a Democrat, pointed to job losses in Iowa after T-Mobile’s acquisition of Iowa Wireless last year and said T-Mobile’s plan to buy Sprint made him “very concerned” about potential negative effects on Iowa.
And Rep. Frank Pallone, also a Democrat, said T-Mobile had sent call center jobs overseas in 2012 and asked for legally enforceable assurances that the new jobs touted by T-Mobile US Chief Executive John Legere would not be sent offshore once the deal wins approval.
Legere defended the $26 billion deal, arguing that it will create jobs and help with the construction of the next generation of wireless networks. He said the merged company would have more capacity that would lead to a push to lower prices.
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“This is a unique merger in that there will be a significant increase in supply,” Legere said.
To win support for the deal, T-Mobile previously said it would not increase prices for three years.