The landmark trial between more than a dozen states trying to block the merger of T-Mobile and Sprint began Monday in Manhattan federal court.
Observers say the trial ranks among the most consequential in the history of the telecommunications industry, according to CNN. The states seek to block a combination of the third- and fourth-largest wireless providers.
T-Mobile and Sprint say they need to become larger to more effectively compete against AT&T and Verizon. The states say the result of a merger will be less competition and less choice for consumers.
In asking a court to prevent the transaction, a coalition of state officials led by Xavier Becerra, California’s attorney general; and Letitia James, attorney general of New York; broke from the U.S. government. The Justice Department and the FCC both approved the deal, with conditions, earlier this year.
At the trial opening on Monday, U.S. District Court Judge Victor Marrero criticized both sides for the large number of witnesses that have been called to testify during the trial. Three will speak about the potential business plan of the merged company, 13 witnesses will discuss competition in the industry, 14 will speak about marketing and two will cover network technology, among several others, according to CNN.
“You’re suggesting that the judge needs to get hit over the head with information from the witnesses,” Marrero said. “I don’t need 13 witnesses to tell me about competition in the industry.”
Examination of the first witness on Monday, Sprint Chief Marketing Officer Roger Solé, suggested the carriers will try to prove that Sprint’s future may be unclear without the merger. Solé testified that the company has lost post-paid customers over the past two years. When federal prosecutors pointed out that the total number of lines on Sprint’s network has been nearly steady, Solé said that number has been buoyed by new connected devices from existing customers, like smartwatches, which don’t generate as much revenue as new cell phone customers. He also argued that Sprint lacks the resources to be a meaningful competitor in 5G, reports CNN.
The states’ challenge is led by New York and California and includes counterparts from 11 other states and the District of Columbia. The 11 states are: Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Oregon, Pennsylvania, and Virginia. T-Mobile winnowed down the list of states it faces in court — reaching settlements with individual attorneys general in Texas, Mississippi, Nevada and Colorado.
The trial is expected to last about two weeks.
December 10, 2019