US District Court Judge Victor Marrero ruled in favor of the Merger between wireless carrier Sprint and wireless carrier T-Mobile earlier today.
The news of the merger initially caused the share price of Sprint to increase by 70% and T-Mobile share price to increase by 11%.
Judge Victor Marrero stated, “T-Mobile has redefined itself over the past decade as a maverick that has spurred the two largest players in its industry to make numerous pro-consumer changes. The proposed merger would allow the merged company to continue T-Mobile’s undeniably successful business strategy for the foreseeable future”.
After the decision was made public Federal Communications Commission(FCC) chairman Ajit Pai said, “I’m pleased with the district court’s decision. The T-Mobile-Sprint merger will help close the digital divide and secure United States leadership in 5G. After the merger, T-Mobile has committed to bringing 5G to 97% of our nation’s population within three years and 99% of Americans within six years. Its 5G network will also reach deep into rural areas, with 85% of rural Americans covered within three years and 90% covered within six years. This transaction represents a unique opportunity to speed up the deployment of 5G throughout the United States, put critical mid-band spectrum to more productive use, and bring much faster mobile broadband to rural Americans”.
In response to the merger, Consumer Reports issued a press release and George Slover, senior policy counsel at Consumer Reports said, “We commend the states for their perseverance and determination in challenging this anti-consumer combination. From the moment this merger was announced, it was clear that it went against what is needed to give consumers the benefits of competition. This merger should never have made it out of the corporate boardroom. Unfortunately, despite all their efforts, the state attorneys general could not convince the court”.
Some large concerns with the merger are that it could:
- Increase consumer prices across the board
- Decrease competition
- Incentivize the introduction of lower quality wireless networks
The next phase in the merger process is to get approved by the California Public Utilities Commission(CPUC). According to the CPUC, “The CPUC’s general proceeding is a formal review process that considers how projects could potentially benefit or harm the public, including its potential effects on utility ratepayers. The CPUC will seek a decision about the project that strikes a balance among power production, land use, and environmental stewardship”.