State attorneys general team up in push to stop T-Mobile/Sprint merger - Reuters

Attorney General of New York Letitia James at a press conference in March. Reuters reports James is leading the joint lawsuit against the merger. (New York Attorney General Office)

U.S. state attorneys general from 10 states are planning to file a joint lawsuit in hopes of preventing the proposed merger between T-Mobile and Sprint. Reuters reports the lawsuit could be filed this week, and as soon as today.

 

New York state's attorney general, Letitia James, who is leading the lawsuit, according to Reuters, has called a press conference for later today. The lawsuit will likely be filed in New York.

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The state attorneys general join a growing chorus of vocal opponents to the merger. Critics of the merger, including the 4Competition Coalition, have warned that the merger could lead to price increases for nearly all wireless customers and increased wholesale rates. They have also argued that the promises made by T-Mobile and Sprint around rural coverage may never come to fruition.

 

RELATED: Opponents to T-Mobile/Sprint merger step up efforts to block deal

 

The proposed $26.5 billion merger won FCC approval last month, but still needs a greenlight from the U.S. Department of Justice, which is reportedly considering new conditions to the merger to preserve competition in the U.S. wireless market.

 

Because the merger would reduce the number of nationwide carriers from four to three, the DOJ may require T-Mobile and Sprint to spin out a fourth wireless carrier as a condition for approval.

 

RELATED: In T-Mobile/Sprint talks, getting to 4 sparks more questions than answers

 

Sprint has already agreed to sell off its prepaid brand Boost Mobile in an attempt to assuage concerns presented by state attorneys general that reduced competition in the prepaid market would hurt consumers.

 

In late May, MoffettNathanson Research analysts pegged the odds of the merger succeeding at 50/50. In a separate research note, New Street Research analysts pointed to state attorneys general as a potential obstacle. “The biggest risk to the deal is a group of states suing to block the deal, and obtaining a court decision that keeps the deal from proceeding,” the analysts said.

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