Nine states and the District of Columbia filed a lawsuit Tuesday to block the proposed merger of T-Mobile and Sprint, believing that the combination of the country’s third- and fourth-largest wireless carriers would threaten competition and harm consumers.
The lawsuit, led by the attorneys general of New York and California, represents a major legal and political headache that could upend the $26 billion telecom tie-up, which also has divided federal regulators in Washington, D.C., who must bless the deal in order for it to proceed.
“When it comes to corporate power, bigger isn’t always better,” said New York Attorney General Letitia James.
In bringing their case, the 10 attorneys general argued that T-Mobile, which is operated by Germany’s Deutsche Telekom, and Sprint, which is owned by the Japanese conglomerate SoftBank, would have incentive to raise prices and reduce service quality if they’re allowed to merge.
While the two companies long have said that their combination would help them deploy next-generation wireless services, known as 5G, the states questioned if the two carriers actually could live up to their commitments to deliver better mobile broadband nationwide.
Iowa was not among the states whose attorneys general were connected to the lawsuit.
“Direct competition between Sprint and T-Mobile has led to lower prices, higher quality service, and more features for consumers,” they wrote in their complaint.
“The cumulative effect of this merger, therefore, will be to decrease competition in the retail mobile wireless telecommunications services market and increase prices that consumers pay for mobile wireless telecommunications services,” the attorneys general continued.
Officials for Sprint and T-Mobile did not respond to requests for comment.