A group of attorneys general from 10 states filed a federal lawsuit Tuesday in a bid to block a proposed merger between wireless carriers T-Mobile and Sprint, a $26 billion deal that has yet to receive the Justice Department’s approval.
The lawsuit, led by Letitia James of New York and Xavier Becerra of California, contends that competition will suffer and consumer prices will rise if the companies combine. Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia and Wisconsin joined the complaint, which was filed in U.S. District Court in Manhattan.
“The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country,” James said in a statement.
She called the deal “exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”
The merger could cost Sprint and T-Mobile subscribers at least $4.5 billion annually, according to the complaint.
Ajit Pai, chairman of the Federal Communications Commission, said last month that he favored the deal, which is expected to reshape the U.S. wireless industry.
The companies expressed “significant commitments” to expand broadband service in poor, rural areas and establish an extensive network using the next-generation 5G wireless technology, Pai said.
T-Mobile and Sprint, the third- and fourth-largest wireless providers in the country, did not immediately respond to requests for comment. The proposed merger would better position the companies to compete against rivals AT&T and Verizon.
In recent months, Democratic lawmakers in Washington have been critical of the proposed deal and of the two companies’ lobbying blitz. John Legere, T-Mobile’s chief executive, has paid many visits to the FCC as part of a charm offensive, and Sprint’s executive chairman, Marcelo Claure, hosted a fundraiser for a Tennessee lawmaker who has supported issues favored by the telecommunications industry.
During the Obama administration, regulators were adamant that the presence of four big nationwide wireless carriers helped keep prices low for consumers and spurred innovation. Their successors in the Trump administration have not taken a similar stance.