Democratic Senators Concerned About T-Mobile-UScellular Merger
'Additional consolidation in the market would have far-reaching effects, reducing choices for consumers,' Senate Democrats say.
Joel Leighton
WASHINGTON, July 24, 2024 – Several Democratic Senators called on the Federal Communications Commission to give close scrutiny to T-Mobile’s decision to acquire UScellular.
The two major telecommunications providers announced their decision to merge some operations on May 28. T-Mobile claimed that growth from the merger would give users more consumer choice in locations dominated by AT&T and Verizon, but the proposed deal has sparked concerns over industry monopolization.
“Additional consolidation in the market would have far-reaching effects, reducing choices for consumers, further concentrating wireless spectrum holdings, and potentially leading to higher prices and other harms for consumers across the country,” six Democratic Senators said in their July 22 letter to the FCC and the Department of Justice.
The letter was signed by Sens. Elizabeth Warren, D-Mass., Amy Klobuchar, D-Minn., Chris Murphy, D-Conn., Bernie Sanders, D-Vt., Cory Booker, D-N.J., and Richard Blumenthal, D-Conn.
The letter – addressed to FCC Chairwoman Jessica Rosenworcel and Assistant Attorney General for the Antitrust Division Jonathan Kanter – cited consumer price increases and negative market impacts from T-Mobile’s previous merger with Sprint in 2020 as reasons for the agencies to prevent further wireless sector consolidation.
The Senate lawmakers said that a decrease in competition from the Sprint merger resulted in cell phone costs for consumers increasing by billions of dollars.
These negative effects, the letter argued, would only be intensified if T-Mobile were allowed to expand its market share. In its deal with UScellular, T-Mobile will receive about 4 million new customers, 2,100 wireless service towers and spectrum assets.
“If approved, T-Mobile’s proposed $4.4 billion acquisition of UScellular would further deplete competition in the industry,” the letter said. “We call on the FCC to carefully review the merger and not to permit the transfer of licenses if it would fail to affirmatively serve the public interest, convenience, and necessity,” the letter said.
Comcast and Charter Communications, both cable companies, have injected competition into the wireless sector through network leasing deals with Verizon. Yesterday, Comcast reported adding 322,000 wireless subscribers in the second quarter, bringing its mobile subscriber base to about 7.2 million.
T-Mobile has said that the merger would generate approximately $1 billion in annual cost synergies, a portion of which will be reinvested to enhance “consumer choice, quality and competition in the wireless industry.”
