Senate Democrats want to have a second hearing with the top executives at Sprint and T-Mobile, before a merger is approved and finalized.
Sprint’s former CEO, Marcelo Claure and T-Mobile’s CEO John Legere both testified before Congress back in June of last year. Just a couple of months after the merger was formally announced. Now, some of the Democrats on the Senate Commerce Committee want to speak with the executives of both companies, once again.
These Democrats include Senators Ed Markey, Amy Klobuchar, Tom Udall, Tammy Baldwin and Richard Blumenthal, who wrote a letter to Republican leadership on Thursday addressing their concerns surrounding the merger, including less competition and 5G.
The argument that the Senators put forth is nothing new with similar arguments having made before and dating back to when AT&T was attempting to buy T-Mobile in 2011. Regulators do not want to see consolidation in the wireless space. They feel that the US should have at least four nationwide carriers. And this merger would put the US down to just three carriers. The letter states that the reduction in competition would “raise a number of important questions that the committee should address.”
Sprint and T-Mobile are well aware of this, in fact in the video announcing the merger, Legere spoke about how there are many more players in the space now. Legere was referring to the cable companies that are trying to be carriers, though they really aren’t. Comcast and Charter are both “carriers” but only in the fact that they offer wireless service. Their network is running off of Verizon’s network, so they aren’t truly a big competitor to the big four wireless carriers.
While Sprint and T-Mobile have already been rather aggressive with their pricing in recent years, that would likely go away if the two do merge. Their aggressive pricing strategy forced AT&T and Verizon to bring back unlimited data and also drop their prices. Senators also pointed to the failed acquisition of T-Mobile, by AT&T back in 2011, in this letter. Finally, the letter also questioned the two carriers need to merge for 5G.
T-Mobile has said that it can do 5G without Sprint, but with Sprint it would be able to build a much more robust network and quicker. This is due to the spectrum it would be gaining from Sprint in the merger. Remember, Sprint has that magical 2.5GHz spectrum that is going to work fantastically for a 5G network, due to its ability to offer more bandwidth for faster speeds. And it’s spectrum that the company already owns, unlike the very high-frequency spectrum that Verizon is currently purchasing.
The letter has been written, but Republicans still control the Senate, so they would need to convince them that a second hearing is required. Right now, the merger is being reviewed by other regulators, including the FCC. Which is currently on hold due to the government shutdown. CFIUS (Committee on Foreign Investment in the United States) already approved the merger, in November. The merger has only cleared one obstacle so far, and there are still a few more to clear before it is approved.
Sprint and T-Mobile still expect the merger to be finalized in the first half of 2019. However that was before the government shut down in late December.