US states UU. They say court prices will rise if Sprint and T-Mobile can merge

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NEW YORK (Reuters) – A group of US states. UU. They sued to block T-Mobile US Inc (TMUS.O) of the merger with Sprint Corp (S.N) on Wednesday he told a federal judge that the agreement would violate antitrust laws and increase wireless prices for consumers.

FILE PHOTO: Smartphones with the Sprint logo are seen in front of the projection of the T-mobile logo screen, in this image taken on April 30, 2018. REUTERS / Dado Ruvic / Illustration

The states filed a lawsuit in June to block the merger, saying it would harm low-income Americans in particular.

T-Mobile and Sprint argue that the merger would allow the combined company to compete more effectively with key operators Verizon Communications Inc (VZ.N) and AT&T Inc (TENNESSEE)

U.S. District Court Judge Víctor Marrero, who presided over a two-week trial last month in federal court in Manhattan, began hearing the final arguments on the case on Wednesday.

“I am here speaking on behalf of 130 million consumers living in these states,” said Glenn Pomerantz, a lawyer for the states, at the beginning of his argument. “If this merger continues, they run the risk of paying billions of dollars more each year for those services.”

When T-Mobile’s majority shareholder, Deutsche Telekom, first contemplated the agreement in 2010, “it expressly and unequivocally admitted that it had the potential to reduce price competition,” Pomerantz said.

The states also emphasized that operators did not need a merger to introduce previous generations of wireless technology, and Pomerantz argued that T-Mobile would continue to acquire spectrum, or air waves that carry data, from a variety of sources, even if the merger were blocked. .

Cell phone companies are expected to present their arguments in favor of the merger of $ 26.5 billion later in the day.

The U.S. Department of Justice UU. Approved the agreement in July after operators agreed to sell some assets to the satellite provider Dish Network Corp (DISH.O), which would create its own cellular network to ensure there were still four competitors in the market. The Federal Communications Commission signed the agreement in October.

Company executives, including T-Mobile CEO John Legere, testified during the trial that Sprint’s business was deteriorating and would not survive if it did not merge with T-Mobile.

Operators argued that selling Sprint’s prepaid business and some wireless spectrum to Dish Network Corp (DISH.O) would help the satellite television provider to become a mobile phone operator and preserve a fourth wireless company in the industry.

The states, led by New York and California, said Dish was ill equipped to become a fourth competitive wireless operator, and said Wednesday that Dish lacks experience, scale and brand recognition in wireless technology.

The states also painted Dish as a spectrum accumulator, a finite resource regulated by the government.

“Dish would not be a suitable replacement for Sprint and the merger would mean higher prices and reduced service quality for millions of people across the country,” New York Attorney General Letitia James said at a press conference on Wednesday. in front of a federal court in Manhattan.

Last week, a federal judge who will evaluate the approval of the merger by the Department of Justice said it would allow comments from friends of the court on the case.

Reports by Arriana McLymore and Sheila Dang; Edition of Noeleen Walder, Cynthia Osterman and Jonathan Oatis

Our Standards:The principles of trust of Thomson Reuters.

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