US States Tell Court Prices To Increase If Sprint, T-Mobile Allowed To Merge (reuters.com) 31
A group of U.S. states suing to block T-Mobile from merging with Sprint on Wednesday told a federal judge that the deal would violate antitrust laws and raise wireless prices for consumers. Reuters reports: The states filed a lawsuit in June to block the merger, saying it would harm low-income Americans in particular. T-Mobile and Sprint contend that the merger would enable the combined company to compete more effectively with dominant carriers Verizon and AT&T. U.S. District Court Judge Victor Marrero, who presided over a two-week trial last month in federal court in Manhattan, began hearing closing arguments in the case on Wednesday.
"I'm here speaking on behalf of 130 million consumers who live in these states," Glenn Pomerantz, a lawyer for the states, said at the outset of his argument. "If this merger goes forward, they're at risk for paying billions of dollars more every single year for those services." When T-Mobile majority shareholder Deutsche Telekom first contemplated the deal in 2010, it "expressly and unambiguously admitted that it had potential to reduce price competition," Pomerantz said. The states also emphasized that the carriers did not need a merger to introduce previous generations of wireless technology, and Pomerantz argued that T-Mobile would continue to acquire spectrum, or airwaves that carry data, from a variety of sources even if the merger was blocked.
"I'm here speaking on behalf of 130 million consumers who live in these states," Glenn Pomerantz, a lawyer for the states, said at the outset of his argument. "If this merger goes forward, they're at risk for paying billions of dollars more every single year for those services." When T-Mobile majority shareholder Deutsche Telekom first contemplated the deal in 2010, it "expressly and unambiguously admitted that it had potential to reduce price competition," Pomerantz said. The states also emphasized that the carriers did not need a merger to introduce previous generations of wireless technology, and Pomerantz argued that T-Mobile would continue to acquire spectrum, or airwaves that carry data, from a variety of sources even if the merger was blocked.
Court prices to increase (Score:4, Funny)
Bad headline
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Bad headline
Indeed. With three major providers versus four, free market and all that, the price of influencing the courts should theoretically diminish.
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Yes, the title should read:
US States Tell Court: Prices To Increase If Sprint, T-Mobile Allowed To Merge
Of course prices will go up if they merge (Score:4, Interesting)
But prices will also go up even more if they are not allowed to merge. Once Sprint dies, and AT&T and Verizon get the spoils...
Also, prices will go up with all the hoopla and investment on nationwide 5G and stuff.
So, my USoA friends, good luck with that. I hope the merger goes through, but in the end, the choice is yours.
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What makes you think AT&T and Verizon would be allowed to pick up the remains of Sprint, even in a bankruptcy sale? The same antitrust regulators would stomp any such a sale into the ground.
Re:Of course prices will go up if they merge (Score:5, Informative)
What makes you think AT&T and Verizon would be allowed to pick up the remains of Sprint, even in a bankruptcy sale?
The main "spoils" are the customers. I doubt if they are going to stop using cell phones.
If Sprint and T-Mobile merge, the customers will mostly stay with the merged entity, and AT&T and Verizon will face a stronger 3rd compeitor.
If the merger doesn't happen, Sprint will finish dying, and the customers will go mostly to the Big Two of AT&T and Verizon, with T-Mobile in a much weaker 3rd position.
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No mod points but you're exactly correct. The states are fools if they actually believe their own rhetoric. They may just be paid off by VZ and T.
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Not true. The main "spoils" are the infrastructure and spectrum. Sprint and T-Mobile both have significantly poorer coverage than AT&T or Verizon. The main thing preventing them from being a better competitor is not customer base, but coverage area and reliability, and combining the spectrum and towers owned by both companies is a huge win.
If customers were the main "spoil", then Sprint wouldn't have agreed to se
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At least someone gets it.
In addition to having more spectrum, it's *what* spectrum is available. Lower frequencies penetrate buildings better which is why VZW has long had the best coverage indoors and TMO used to be horrible to unusable. That's changed a lot in the last 3-4 years but would significantly change even more if the two of them combined.
It's kind of laughable that they're suing to stop the merger because it will 'raise prices' when TMO single-handedly forced the wireless industry in the USA to
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True, though encoding also matters a great deal. The CDMA encoding that Sprint and Verizon use is a lot more resistant to multipath interference than the GSM encoding that AT&T and T-Mobile use, IIRC. Of course, with all carriers shifting to LTE (which is even better at handling multipath interference), this is becoming less and less important except when you're
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If not AT&T or Verizon, then who would buy a noneconomic network? If there is no merger with T-mobile, then Sprint goes out of business, and customers move to one of the other three.
My recommendation to Sprint if the merger is disallowed is to file for Chapter 7 bankruptcy and announce they are closing at the end of the year. If the States want to buy them out, then they can pony up the cash. Their financial report already states they are not a going concern, hence the merger.
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I wonder if a state could buy out Sprint's assets within their state and run the towers and backend network as a MVNO backend. Sort of the wireless version of municipal broadband, except at the state level.
I could see where it might work in a fairly dense state where you're not spending a huge amount of money to cover empty geography, although perhaps it might gain more political approval if it resulted in rural areas getting better coverage and maybe could be used for "rural broadband" initiatives where t
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I wonder if a state could buy out Sprint's assets within their state and run the towers and backend network as a MVNO backend. Sort of the wireless version of municipal broadband, except at the state level.
And each state having to buy their own core network (so called telecom switches, HLR, AAA, etc), replicate the centralized OSS (monitoring) and BSS (billing and customer care), and hire all the associated extra personnel. All at a HUUUUUGE cost.
Because, there is no such thing as "One core per state", one BSS per state, one OSS per state....
You see, a cell network is much more than the towers and frequencies, and many of those things are centralized... so...
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Why are those the only two options?
Option 3: T-Mobile and Sprint don't merge, and both find a way to stay afloat as separate entities. As a result, prices don't go up.
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So for you, Sprint isn't a good option. But for lots of people who don't travel so much (and I know many of them), it really doesn't matter that Sprint has no coverage between highways or at remote campsites. As long as they have coverage along the major highways and in the cities (which they do), lots of people are just fine with that.
And...who really cares about 5G? The advertisers do, for sure. They want to be able to feed you even more ads, on every device imaginable. But for most people, good old 4G is
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You've had too much verizon kool-aid.
The TMO merger will very likely lead to lower prices because they can compete at-scale with VZW directly. TMO already disrupted the industry once with an overall huge benefit to consumers.
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Mergers are *never* about lowering prices. That's just the line they feed the regulators to keep them from shutting the merger down. Mergers are about making the merged company stronger so they can *raise* prices, or at least so they can avoid lowering them more.
Put more simply, mergers aren't about benefiting the customer. They are about benefiting the owners of the companies, about raising profits through higher pricing power and overhead cost-cutting. Mergers rarely deliver the savings promised. I've see
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This. A thousand times this. I don't understand why this isn't obvious. Sprint won't make it without the merger. That leaves two behemoths and a T*Mobile that isn't as strong as they could be with the Sprint merger. It's also possible that T*Mobile wouldn't survive long-term. At any rate, I'd rather have three big companies fighting it out than two big companies and one relatively tiny company.
Kinda 30 years too late (Score:1)
Now everything is 2-3 companies. Radio? iHeart media (which used to be Clearchannel but they ruined that brand). But hey! Tons of layoffs today for established local DJs in favor of centrally programmed playlists. Sprint-T-Mobile? In the past week I've had a c
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Now everything is 2-3 companies.
The rule of thumb is that the biggest company in an industry makes 60% of the profits, number 2 makes 30%, number 3 makes 10%, and everyone else is lucky to just break even.
Many institutional investors have a policy of only investing in companies likely to be #1 or #2.
These same institutional investors use their influence to pressure companies to avoid competitive "price wars" over market share. If Fidelity, Vanguard, and BlackRock each have board seats at both Ford and GM, the last thing they want is a pr
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One more reason why markets in the "capitalist" U.S. are so dysfunctional.
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The capitalist version of central planning isn't really much better than the communist version of central planning.
Beyond stupid (Score:2)
Vertical separation helps solve these problems. (Score:1)
Virtual network operators basically solve the problem of introducing competition into an industry which by its nature can't have many entrants. There are dozens of MVNOs that provide low-priced services. There are even a few that provide service on all four carriers.
The only real problem is that carriers seem to play some sort of game with them. Carrier family plans seem to be better than most MVNOs. Verizon somehow requires that MVNOs never mention them in advertising (apparently not a problem for AT
Virgin Mobile is Shutting Down (Score:2)
get a copy editor (Score:2)