State AGs, Carriers Preview T-Mobile/Sprint Trial Arguments
State attorneys general sparred with T-Mobile and Sprint ahead of the Dec. 9 trial on the carrier’s proposed combination that would also establish Dish Network as a national wireless carrier. Plaintiffs and defendants filed pretrial memos Tuesday at the U.S. District Court for the Southern District of New York. “We are proceeding as planned and will be going to trial in less than two weeks,” a spokesperson for New York AG Letitia James (D) emailed Wednesday.
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Meanwhile, Texas is joining the DOJ settlement, after Monday ditching state AGs challenging the deal (see 1911250050), the department said Wednesday. The settlement also includes Arkansas, Colorado, Florida and seven other states. New York, California, Washington, D.C., and 11 other states remain part of the lawsuit.
The California Public Utilities Commission will scrutinize Dish at Dec. 5-6 hearings in its separate T-Mobile/Sprint review (see 1911260020), said a Tuesday ruling by Administrative Law Judge Karl Bemesderfer. Testimony's needed on "the addition of DISH as a proposed fourth facilities-based wireless carrier, replacing Sprint," and "the impacts of this change on California consumers and the potential competitive harms of the proposed merger," the ALJ said.
“Trust competition and stop this merger,” state AG plaintiffs wrote (in Pacer) to the district court. Going from four to three carriers “would dramatically increase market concentration in an already highly concentrated industry and, under well-established law, is presumptively illegal,” they said. The three remaining carriers could more easily coordinate behavior, states said. That means higher prices, especially hurting low-income consumers that benefited most from T-Mobile competition with Sprint, they said.
The suing states “know of no litigated case where the merging parties have prevailed based on an argument that anticipated efficiencies offset anticompetitive harms,” and this shouldn’t be the first, they said. Also, the court shouldn’t allow an anticompetitive merger based on the hope that Dish will one day grow into a viable wireless company equal to a competitor that already exists today,” the states said. “If that hope proves unfounded, the cost of failure will not be borne by Defendants -- who would stand to benefit from that failure -- but by consumers who will be left with less competition and higher prices.”
Plaintiffs “ask this Court to take the unprecedented step of overturning the judgment of the FCC and the DOJ and block a merger that promises significant benefits well beyond those states’ borders,” returned (in Pacer) the carriers, who disputed characterizing the deal as a four-to-three outcome. “DISH will emerge as a new competitor, and ... other large sellers like TracFone with 22 million subscribers and Comcast with its own infrastructure, already compete.” Federal conditions ensure T-Mobile meets price and buildout promises and that Dish “will enter the market as a vigorous competitor in mobile wireless services,” the defendants said.
“The world with the merger will be substantially better for consumers than the world without,” said the carriers, promising more data bandwidth, better network performance, faster speeds and better coverage and reliability. “More supply and higher quality at lower cost will result in lower prices and greater value for consumers.” Low-income people will greatly benefit, including because T-Mobile will be able to provide a fixed wireless broadband service that’s less expensive than cable, they said.