It"s no secret that Sprint, the nation"s third largest wireless phone carrier, has been highly critical of the proposed merger between the nation"s largest carrier AT&T with the fourth biggest carrier T-Mobile. Today Sprint took those complaints to the next level. It announced today that it has filed a lawsuit in the District of Columbia that seeks to block the merger, which AT&T said will cost $39 billion.
Sprint listed several reasons behind its lawsuit. One was it felt that an AT&T/T-Mobile merger would "harm retail consumers and corporate customers by causing higher prices and less innovation." It also feels that if a merger is approved and goes through, AT&T and the nation"s second largest wireless carrier Verizon Wireless "would control more than three-quarters of that market and 90 percent of the profits." Finally Sprint Nextel claims that the merger would also allow AT&T and Verizon to "have the ability to use its control over backhaul, roaming and spectrum, and its increased market position to exclude competitors, raise their costs, restrict their access to handsets, damage their businesses and ultimately to lessen competition."
Last week the US Department of Justice filed its own lawsuit attempting to block the AT&T/T-Mobile merger, citing reasons that are similar to Sprint"s legal action filed today. AT&T said that it was "surprised and disappointed" by the Justice Department"s lawsuit and said it plans "to vigorously contest this matter in court." One possible solution is that AT&T could sell off some of T-Mobile"s assets to other parties before it merges with the rest of the company.