When the news first broke that Sprint was considering a merger with T-Mobile, critics almost immediately argued the deal could decrease competition among U.S. carriers. Last week Sprint’s leadership met with the Justice Department to discuss the merger only to receive a skeptical response, and yesterday the carrier got a similar reaction after meeting with FCC chairman Tom Wheeler.
Speaking to Sprint’s Chairman Masayoshi Son and Chief Executive Dan Hesse, Wheeler admitted he is “highly skeptical of the potential bid,” an FCC official told Reuters. The FCC Chairman reportedly promised to keep an open mind on the issue, but said the odds aren’t in Sprint or its Japanese parent company SoftBank’s favor.
“I’m not unduly surprised by the FCC chairman’s skepticism. I feel it’s a rather typical reaction,” an anonymous source close to SoftBank told Reuters
Sprint has argued that U.S. regulators shouldn’t shoot down the possible merger without giving it a full and unbiased review. The carrier also claims that both Sprint and T-Mobile are still too small to successfully challenge AT&T or Verizon on their own, creating a clear imbalance among the country’s top four carriers.
For the moment, both the FCC and the U.S. Justice department appear firmly opposed to any mergers between the country’s four leading carriers. While AT&T was allowed to make an ultimately unsuccessful bid for T-Mobile back in 2011, both Wheeler and antitrust chief William Baer say that outcome has led to a stronger and more competitive market today.