A case that will have significant ramifications for the U.S. wireless industry will begin Monday, as T-Mobile and Sprint defend their merger plans.
The number three and four carriers have been pursuing a merger agreement that has been widely opposed by various entities. After initial concerns, both the Federal Communications Commission (FCC) and the Department of Justice (DOJ) signed off on the merger. Despite the federal agencies backing it, a coalition of nearly 20 states filed a lawsuit to prevent the merger.
Over the course of the past few months, T-Mobile has been working overtime trying to address concerns the individual states have, in the hopes of whittling down opposition. The strategy has proved relatively successful, as a number of states have dropped out of the lawsuit after receiving concessions from T-Mobile. Texas, Nevada and Colorado are the most recent ones to drop the suit, leaving 13 states and the District of Columbia still pursuing it.
As The Wall Street Journal (WSJ) reports, “legal experts say it is unprecedented for the states to reject such a settlement and sue to block a merger of this size and national scope without the support or involvement of federal authorities.”
The WSJ report emphasizes the long-term stakes hanging in the balance.
“A victory for the carriers, which say the merger will allow them to offer better services, could arm other companies with new arguments for the benefits of consolidation. But a win for the coalition could give states newfound power in antitrust enforcement when they are also investigating U.S. tech giants.
“If the states prevail, ‘companies will have to take them more seriously,’ said New York University law professor Harry First. ‘They’ll have to have really serious discussions with states like California and New York.’”