T-Mobile, Sprint Price Stability Commitments Are Positive

Yesterday T-Mobile and Sprint filed a pleading at the FCC pledging rate stability for consumers for at least three years after the merger is approved. Specifically, the merger applicants stated: "T-Mobile and Sprint legacy rate plans will continue as New T-Mobile plans for three years after the merger or until better plans that offer a lower price or more data are made available, whichever occurs first." While T-Mo and Sprint said that the stabilized rate plans may be adjusted for increases in taxes, surcharges, and the like beyond their control, on the whole the price stability commitment should be reassuring to consumers -- and to the regulators and antitrust authorities reviewing the proposed merger.

Any merger this size deserves careful -- but nevertheless timely -- scrutiny by the appropriate authorities, including the FCC and the Department of Justice. In comments submitted to the FCC in August 2018, Free State Foundation scholars said: "[T]here is strong evidence that the proposed T-Mobile/Sprint merger, if approved, would greatly benefit consumers and enterprises by enabling faster mobile broadband speeds, higher data capacity, and reduced per-megabit prices. A combined 'New T-Mobile' would have the resources to rapidly deploy a nationwide 5G network and to compete more effectively against AT&T and Verizon, presently the two largest wireless carriers."

Nothing that has occurred since the comments and reply comments were submitted has altered that view. Some form of "price stability" commitments have almost become pro forma in merger proceedings, even in advance of the almost inevitable, but nevertheless still unseemly, last-minute "midnight" extractions of volunteered regulatory conditions. That said, the new T-Mobile-Sprint commitments bolster the case that merger approval would be pro-consumer.

It is also worthwhile noting that Representative Anna Eshoo (D-CA), not one known to endorse proposed telecom mergers on a knee-jerk basis, has submitted a letter, with broad bipartisan support, to the FCC and DOJ pointing out, in their view, the pro-consumer benefits of the merger and the benefits to the economy in terms of increased investment and innovation.