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States sue to stop $26.5 billion Sprint-T-Mobile deal

A woman using a cellphone walks past T-Mobile and Sprint stores in New York in 2010. Published reports say a group of state attorneys general are planning a lawsuit to block a $26.5 billion merger of wireless carriers T-Mobile and Sprint. It’s an unusual step ahead of a decision by federal antitrust authorities. 

NEW YORK — A group of state attorneys general led by New York and California filed a federal lawsuit Tuesday to block T-Mobile’s $26.5 billion bid for Sprint, citing consumer harm.

The state attorneys general said the promised benefits, such as better networks in rural areas and faster service overall, cannot be verified, while eliminating a major wireless company will immediately harm consumers by reducing competition and driving up prices for cellphone service.

New York Attorney General Letitia James said in a statement that combining the two companies would reduce access to affordable, reliable wireless service nationwide and would particularly affect lower-income and minority communities in New York and other urban areas.

Other attorneys general joining Tuesday’s lawsuit, filed in U.S. District Court in New York, are from Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia and Wisconsin. All 10 attorneys general are Democrats.

T-Mobile and Sprint have argued that they need to bulk up to upgrade to a fast, powerful “5G” mobile network that competes with Verizon and AT&T. The companies are appealing to President Donald Trump’s desire for the U.S. to “win” a global 5G race.

Consumer advocates, labor unions and many Democratic lawmaker worry that the deal could mean job cuts, higher wireless prices and a hit to the rural cellphone market.

T-Mobile declined comment. Sprint and the Justice Department did not immediately respond to requests for comment.

T-Mobile promised the FCC it would build out a 5G network and invest in rural broadband on a specific timeframe or pay penalties. It also promised to sell off Sprint’s prepaid Boost Mobile brand and keep price increases on hold for three years.

That was enough for FCC Chairman Ajit Pai to back the deal. The other two Republican commissioners indicated they would join him.

The state attorneys general in Tuesday’s lawsuit say that combining Sprint and T-Mobile will make the industry as a whole — Verizon and AT&T, too — less likely to offer plans and services that consumers like. And they say that the companies don’t need to combine in order for 5G service to roll out in the U.S., noting that Sprint has already launched a 5G network in parts of several cities and T-Mobile has separately been working to deploy 5G.

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