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DOJ Wrong to Intervene in Merger Between Sprint and T-Mobile

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Today, the Wall Street Journal reported that antitrust enforcement staff at the Department of Justice have told T-Mobile and Sprint the proposed merger between the two companies is “unlikely to be approved as currently structured.” The WSJ report says the antitrust staff is considering whether the proposed deal should be considered a threat to competition. 

CEI Vice President for Policy Wayne Crews, who co-authored a new paper “The Case against Antitrust Law: Ten Areas Where Antitrust Policy Can Move on from the Smokestack Era” released by CEI today, said:

“The idea that the Trump administration—otherwise largely committed to a hands-off, deregulatory agenda—would block the proposed merger between Sprint and T-Mobile is baffling. Blocking the merger would contradict the administration’s long-stated plans for vast new infrastructure growth in the United States -- of which networks and cells needed to launch 5G are critical examples. This type of healthy, pro-consumer investment should come from private ventures like a merged Sprint/T-Mobile, not government; and that requires big companies to make significant investments without worrying about Washington. 

“It’s also important to note that invoking antitrust laws in this case is de-facto corporate welfare for Verizon and AT&T. It means they can stand pat rather than reacting to dynamic changes to the marketplace. Such is the way that blocking mergers generally, not just in this case, only hinders the private sector’s ability to make needed investments.  

“The proposed merger between Sprint and T-Mobile is not a question of reducing four carriers down to three. It’s questionable whether Sprint and T-Mobile will last on their own in a 5G world, absent this merger. With respect to the unconvincing argument that a Sprint/T-Mobile merger would result in too much market concentration, the Trump administration could actually and perversely accelerate concentration of the mobile carrier market if Sprint and T-Mobile are blocked from merging and are unable to compete as standalone entities in a market revolutionized by 5G. That’s just one reason why my colleague Ryan Young and I are calling for the repeal of antitrust laws and regulationsin our latest report.”

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