Experts Say the DOJ Justification For T-Mobile/Sprint Merger Approval Is a Joke

An anonymous reader quotes a report from Motherboard: The Department of Justice has approved T-Mobile’s controversial $26 billion merger with Sprint. And while the agency proposed a number of remedies it says will mitigate the competition and job-eroding impact of the deal, experts say the fixes will do nothing of the sort. From the beginning, the biggest issue with T-Mobile’s planned $26 billion merger with Sprint was the fact that it would reduce the number of major U.S. carriers from four to three. Historically, (say in Canada or Ireland) such consolidation results in two things: much higher prices, and a significant culling of jobs as redundant positions are eliminated. The DOJ says it will impose requirements offsetting the competitive harm of the deal. More specifically, the DOJ says that T-Mobile and Sprint will need to offload Sprint’s Boost Mobile and some spectrum to Dish Network, who’ll then attempt to build a new, viable fourth competitor from these scraps to offset the elimination of Sprint from the market. But experts consulted by Motherboard say the proposal isn’t likely to work, and the end result of the merger will still very likely be higher prices and worse service for all. Gigi Sohn, a former FCC lawyer and telecom expert, says the deal “certainly won’t lead to a viable fourth competitor any time soon, if ever.” She notes that Boost Mobile only has just 8.8 million subscribers, a far cry from the 158 million and 156 million subscribers of AT&T and Verizon, respectively. Building a viable fourth competitor requires far more than just a small prepaid company and some spectrum.

Consumer groups like Public Knowledge blasted the proposal, noting that a far more simpler solution would be to block the deal and force Sprint to find a suitor outside of the merger process. “Sprint is a significantly stronger competitor today than a new fourth competitor could be for the foreseeable future,” the groups said. The struggles that Dish and other would-be new entrants have consistently faced underscore that even with the best of intentions and a full commitment to deploy and compete, nothing is certain. Consumers will face considerable harm if the marketplace does not develop as the DOJ envisions.”

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