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States sue to stop $26.5 billion Sprint-T-Mobile deal

NEW YORK (AP) — A group of state attorneys general led by New York and California filed a federal lawsuit Tuesday to block T-Mobile’s $26.5 billion bid for Sprint, citing consumer harm.

The state attorneys general said the promised benefits, such as better networks in rural areas and faster service overall, cannot be verified, while eliminating a major wireless company will immediately harm consumers by reducing competition and driving up prices for cellphone service.

New York Attorney General Letitia James said in a statement that combining the two companies would reduce access to affordable, reliable wireless service nationwide and would particularly affect lower-income and minority communities in New York and other urban areas.

Other attorneys general joining Tuesday’s lawsuit are from Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia and Wisconsin. All 10 attorneys general are Democrats. The lawsuit was filed in U.S. District Court in New York.

The lawsuit is an unusual step by state officials ahead of a decision by federal antitrust authorities. The Justice Department’s decision is pending. The Republican majority of the Federal Communications Commission supports the deal , though the agency has yet to vote.

Too many “mega mergers have sailed through the governmental approval process,” so it’s up to the states to “step up,” James said at a news conference.

“There’s no rule or regulation that we have to wait for the DOJ,” she said. She added the attorneys general will “continue to litigate whether the DOJ approves the merger or not.”

Diana Moss, the president of the American Antitrust Institute and an advocate for tougher antitrust enforcement, said the states’ lawsuit could signal to other potential merger partners that there would be tougher enforcement from states even if the federal government permitted deals to go through.

James said Tuesday that her office’s renewed focus on mergers and anti-competitiveness goes beyond the tech industry, though she did not elaborate.

T-Mobile and Sprint have argued that they need to bulk up to upgrade to a fast, powerful “5G” mobile network that competes with Verizon and AT&T. The companies are appealing to President Donald Trump’s desire for the U.S. to “win” a global 5G race.

Consumer advocates, labor unions and many Democratic lawmakers worry that the deal could mean job cuts, higher wireless prices and a hit to the rural cellphone market.

Amanda Wait, an antitrust lawyer and former Federal Trade Commission lawyer, said states are acting because they disagree with what they have seen the federal government doing.

“They see the FCC accepting certain remedies and concessions that don’t, in their minds, solve the problem,” she said.

T-Mobile declined comment. Sprint and the Justice Department did not immediately respond to requests for comment.

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