Sprint has announced in a concise press release that it has filed its own lawsuit in the District of Columbia to block the AT&T/T-Mobile merger. The suit follows the suit first filed by the Department of Justice last week following months of analysis by both the FCC and the Department of Justice regarding the proposed merger and its effects on marketplace competition, prices, and overall effects on wireless customers. In the release, Sprint mentions the following points related to the merger and how it would negatively impact the current marketplace.
- Harm retail consumers and corporate customers by causing higher prices and less innovation.
- Entrench the duopoly control of AT&T and Verizon, the two “Ma Bell” descendants, of the almost one-quarter of a trillion dollar wireless market. As a result of the transaction, AT&T and Verizon would control more than three-quarters of that market and 90 percent of the profits.
- Harm Sprint and the other independent wireless carriers. If the transaction were to be allowed, a combined AT&T and T-Mobile would have the ability to use its control over backhaul, roaming and spectrum, and its increased market position to exclude competitors, raise their costs, restrict their access to handsets, damage their businesses and ultimately to lessen competition.
This also follows reports of AT&T being willing to make major concessions in order to make the merger a possibility, such as selling 25% of the current T-Mobile, much in the way that Verizon spun off certain sections of the former Alltel Wireless in order to complete its own merger and purchase of the regional CDMA carrier in 2009, as well as selling off additional spectrum with priority given to smaller regional carriers and Sprint in an attempt to keep hopes of the merger alive.
However, the way things are going points to both the government and the market being vehemently opposed to this merger due to seeing the previous results of the BellSouth and Cingular Wireless merger that in effect recreated the former AT&T that was previously broken up via government decree. With Sprint filing this latest lawsuit, it remains to be seen whether AT&T can still attempt to convince regulators that the merger is a good thing for shareholders, employees and customers of both carriers in light of overwhelming evidence to the contrary.
For its part, AT&T has responded with its own statement regarding Sprint’s suit:
