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The letter sent on Tuesday to the Federal Communications Commission and the Department of Justice comes as the top executives of the telecom companies prepare to testify in front of two House panels this week to defend the merger they say is necessary in order to continue to compete against larger rivals Verizon and AT&T.
|TMUS||T-MOBILE US INC||78.33||+1.89||+2.47%|
|VZ||VERIZON COMMUNICATIONS INC.||57.63||+0.30||+0.52%|
The signatories say the transactions between T-Mobile and Sprint -- the third and fourth largest U.S. wireless carriers, respectively -- would stifle competition and undermine innovation. And while the two firms say the combined entity will be focused on rolling out faster fifth-generation wireless technology, the lawmakers argue it would not “extend affordable coverage to all Americans.”
“Blocking this proposed combination is necessary to send a strong signal that our enforcement officials are vigorously protecting Americans from harmful anticompetitive behavior,” they wrote. “This merger will turn the clock back, returning Americans to the dark days of heavily consolidated markets and less competition, with all of the resulting harms" the letter noted.
Sens. Richard Blumenthal of Connecticut, Amy Klobuchar of Minnesota, Tom Udall of New Mexico, Sherrod Brown of Ohio, Kirsten Gillibrand of New York, Elizabeth Warren and Ed Markey of Massachusetts, Bernie Sanders of Vermont, Cory Booker of New Jersey all signed onto the letter.
The DOJ and FCC have historically been skeptical of mergers that would leave just three large telecommunications providers in the U.S. In 2011, the Justice Department blocked AT&T's plan to takeover T-Mobile. A potential prior transaction between Sprint and T-Mobile was also reportedly scuttled after a harsh feedback from both agencies.
In an effort to improve their changes of getting federal approval, the two companies recently pledged to withhold any price hikes for the first three years – a promise that critics labeled as full of loopholes.
The Democratic senators argue that, because T-Mobile and Sprint’s products are viewed as interchangeable, the merger would remove a key incentive for the two to compete against each other for the most attractive offerings.
“Allowing these two close competitors to merge will remove an important market dynamic that has driven prices down in the industry in recent years,” they wrote.
Sprint and T-Mobile did not immediately respond to request for comment.