T-Mobile's Antitrust Answer Boasts of ‘Enhanced Competition’ From Sprint Buy

T-Mobile’s 2020 Sprint buy has resulted in “enhanced competition across the mobile wireless service industry,” not less, just as DOJ’s Antitrust Division, the FCC, two federal judges and others predicted that it would, said T-Mobile’s answer Monday (docket 1:22-cv-03189) in U.S. District Court for Northern Illinois in Chicago to the antitrust class action by seven AT&T and Verizon customers alleging the transaction caused their own wireless rates to soar.

T-Mobile/Sprint delivered to T-Mobile consumers “lower prices and higher-quality, faster network services” than either T-Mobile or Sprint “could have offered alone,” said the answer. T-Mobile has been able to bring these “wide-ranging benefits” to consumers “as a direct result of joining with Sprint to expand its network capabilities,” especially by speeding the industry’s deployment of 5G networks around the country, it said. T-Mobile/Sprint “has been procompetitive and dramatically improved circumstances for wireless customers across the country,” it said.

T-Mobile’s assessment of stronger competition differs from that of U.S. District Judge Thomas Durkin, who in his Nov. 2 order denied T-Mobile’s motion to dismiss the complaint. Durkin held that T-Mobile/Sprint likely “exacerbated the risk of price coordination” in the wireless market space, thereby reducing competition among all the carriers (see 2311030011). T-Mobile responded by asking Durkin to certify his denial order for interlocutory appeal to the 7th Circuit U.S. Court of Appeals (see 2311290042). The motion to certify is pending.

Combining the “complementary spectrum and related assets” of T-Mobile and Sprint has allowed T-Mobile to expand its 5G network “at a pace vastly exceeding the expected reach either company was forecasted to have achieved absent their merger,” said the answer. T-Mobile’s rapid deployment of 5G “is a direct result of the merger,” and has caused Verizon and AT&T “to ramp up their 5G deployments to try to keep up,” it said.

T-Mobile/Sprint delivered to T-Mobile consumers "lower prices and higher-quality, faster network services" than either T-Mobile or Sprint "could have offered alone," said the answer. T-Mobile has been able to bring these "wide-ranging benefits" to consumers "as a direct result of joining with Sprint to expand its network capabilities," especially by speeding the industry's deployment of 5G networks nationally, it said. T-Mobile/Sprint "has been procompetitive and dramatically improved circumstances for wireless customers across the country," it said.

All this increased 5G competition “has resulted in improved wireless and broadband service for millions of customers,” especially low-income and rural customers, said the answer. Consumers have also benefited from increased price competition, it said. Low-income prepaid customers have been the biggest “beneficiaries of improved services and lower-cost plans as a result of the merger,” it said.

PT-Mobile offers a $15 a month plan for low-income consumers that’s nearly “half the cost of its lowest pre-merger smartphone plan,” said the complaint. It offers another plan for $25 a month “that provides three times the data at a lower price point than the least expensive pre-merger smartphone plan,” it said.

AT&T, Verizon and other carriers “have been spurred to compete with T-Mobile’s lower-priced offerings,” said the answer. Some have eliminated surcharges for 5G and have launched unlimited 5G smartphone plans to keep pace with T-Mobile, it said. Still other plans offer free high-end phones and other enhancements, it said.

T-Mobile/Sprint “has brought immediate and long-term benefits to consumers and resulted in a more competitive landscape across multiple sectors,” said the answer. The plaintiffs’ “extraordinary” lawsuit to vacate the merger on anticompetitive grounds “seeks to turn the antitrust laws on their head, and unwind a clearly procompetitive merger to the detriment of consumers,” it said.

Key among the 16 affirmative defenses that T-Mobile lists in its answer is its assertion that the plaintiffs lack Article III standing, and that they have no antitrust standing because they haven’t suffered any injury in fact or antitrust injury “proximately caused by any alleged conduct by T-Mobile.” The company also asserts that class members living in 16 states, plus the District of Columbia, “are estopped from bringing any claims already litigated on their behalf” by their state attorneys general under the doctrine of parens patriae (parent of the country or homeland). U.S. District Judge Victor Marrero for Southern New York in Manhattan decided the AGs’ litigation in T-Mobile’s favor in early 2020, enabling the transaction to proceed.