Sprint and T-Mobile announced a merger back in November, but it’s easier said than done. Because they are both such large companies – the third and fourth largest telecom companies in the U.S. – the merger must get approval by the government at several different levels.
The next step in the process is a hearing before the House of Representatives. The point is to discuss the impact the merger will have on the economy and on consumers. Historically, large mergers were frowned upon in the belief that the closer a company gets to a monopoly, the more it can manipulate the market for its gain at the expense of the consumer.
The laws that govern this type of merger go all the way back to the monopolies established by the ‘robber barons’ at the end of the 19th Century. Early 20th Century lawmakers tried to overcome this with anti-trust laws. The next few decades saw many monopolies broken up, including the O.G. telecom company, Bell, which was broken up into many different regional companies.
In the last few decades, however, the government has played a little more fast and loose with anti-trust laws, generally to the benefit of large corporations.
The debate over how large companies should be allowed to get won’t be resolved anytime soon. As for Spring and T-Mobile, the upcoming hearings are most likely just a formality before they get the green light.
