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Consumers Union to Senate panel: Sprint/T-Mobile merger would reduce competition, leaving consumers paying more, getting less

Wednesday, June 27, 2018

 

Washington, D.C. — The proposed merger of two of the nation’s leading wireless companies — Sprint and T-Mobile — would significantly reduce competition, leaving consumers paying more and getting less, according to Consumers Union, the advocacy division of Consumer Reports, in testimony today before a U.S. Senate subcommittee hearing.

George Slover, senior policy counsel for Consumers Union, said, “Vigorous competition from – and between – Sprint and T-Mobile have brought tremendous benefits to consumers, in greater choice and affordability.  We want to preserve and protect that.  The claimed advantages from giving Sprint and T-Mobile a shortcut to increased capabilities do not seem enough to overcome the harms to competition and consumers that we believe would result.”

Mr. Slover’s full written testimony is available here.

Slover said the companies’ promised benefits of the merger are uncertain and may not require a merger, while the loss to competition seems clear.  The cost savings envisioned by the companies are easy to claim, but hard to substantiate, he said, and neither company is headed for imminent failure, and they do not need to get bigger to provide attractive choices to consumers.

“We don’t see how the serious competitive concerns with this merger can be addressed with pledges that a merged New T-Mobile will refrain from using its new power in ways that harm competition.  What matters is not what T-Mobile and Sprint will promise, even if we grant them the best of present intentions.  What matters is what the merged corporation’s inherent incentives will be, how they would be altered by the merger from what they are now.  And that change will be deep, and enduring,” Slover said.

The proposed merger will be reviewed by the Federal Communications Commission and the U.S. Department of Justice.

The witnesses at today’s hearing held by the Senate Judiciary Subcommittee on Antitrust, Competition and Consumer Rights are Slover, the chief executives of T-Mobile and Sprint, and senior executives from Public Knowledge, Intel Corporation, and American Enterprise Institute.  The hearing, entitled “Game of Phones: Examining the Competitive Impact of the T-Mobile-Sprint Transaction,” is available online here.

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Contact: David Butler, dbutler@consumer.org, or Kara Kelber, kara.kelber@consumer.org

Consumers Union is the advocacy division of Consumer Reports, an independent, nonprofit organization that works side by side with consumers to create a fairer, safer, and healthier world. For 80 years, CR has provided evidence-based product testing and ratings, rigorous research, hard-hitting investigative journalism, public education, and steadfast policy action on behalf of consumers’ interests. Unconstrained by advertising or other commercial influences, CR has exposed landmark public health and safety issues and strives to be a catalyst for pro-consumer changes in the marketplace. From championing responsible auto safety standards, to winning food and water protections, to enhancing healthcare quality, to fighting back against predatory lenders in the financial markets, Consumer Reports has always been on the front lines, raising the voices of consumers.