If T-Mobile and Sprint built out that network, the only way to make the math of the deal work would be to steal customers from AT&T and Verizon. The combined company would need to take millions of customers away from the big players. The only way to do that: lower prices. That's especially true now that companies like AT&T, thanks to its new Time Warner holdings, will be able to offer customers extra perks that customers of T-Mobile and Sprint won't be able to get.
John Legere, T-Mobile's chief executive, was questioned about pricing during congressional testimony in late June. He explained that he would "have every incentive from an economic and business perspective to lower prices to attract new customers and drive customer usage to fill its greatly increased and less expensive capacity."
Perhaps the more persuasive comment came from Sprint's chief executive, Marcelo Claure, who pointed out that little had changed for the better since his predecessor, Dan Hesse, testified before Congress seven years ago and voiced concerns about the proposed merger of T-Mobile and AT&T.
At the time, Mr. Claure told Congress, AT&T and Verizon controlled two-thirds of the market — the same share they control today.
"And they have increasingly found ways to use their scale to cement their advantages rather than to compete vigorously with others in the marketplace," he said. He punctuated his point by saying the market caps of AT&T and Verizon are each twice the size of a combined T-Mobile-Sprint.
In truth, today's wireless market is bifurcated between the haves and the have-nots. It's almost as if the telecommunication market were two markets. AT&T and Verizon serve the wealthier and business customers, and T-Mobile and Sprint serve more price-conscious consumers.
T-Mobile in particular has long been described as a "maverick" — that's a classic antitrust term for companies that are viewed as holding down prices in an industry, the way Southwest Airlines has long done. The worry has long been that the combined company would raise prices. But as logical as that sounds, it's likely to do the opposite.
Robert Bork, President Ronald Reagan's Supreme Court nominee in 1987, wrote a seminal book, "The Antitrust Paradox," which argued that it was possible for a market to go from four rivals to three and see economic competition go up.
Of course, it is possible that a price war could end with the three companies deciding to "rationalize" their pricing just the way the large airlines have. That is not a trivial issue. But many industries with three strong players — especially an industry that requires significant capital costs — turn out more competitive.
Antitrust concerns aren't the only hurdle, either. There is another that could be just as daunting: the Committee on Foreign Investment in the United States. Because T-Mobile is controlled by its German parent, Deutsche Telekom, and Sprint is controlled by Japan's SoftBank, it is possible that the committee could claim that a merger poses a threat to national security. Lawmakers have raised security questions about the merger, citing connections between SoftBank and the Chinese device maker Huawei, which has been called a national security threat.
The committee has usually not blocked such deals, but the steel and aluminum tariffs demonstrate that the Trump administration has no qualms about invoking national security to intervene in the world of business.
And there is still the matter of the voice we haven't heard.
Mr. Trump has never been shy about publicly opining on headline-grabbing mergers. He was a vocal critic of AT&T's tie-up with Time Warner, he was a fan of Disney's acquisition of most of 21st Century Fox's assets, and he recently had harsh words for the government's blocking of Sinclair Broadcasting's deal to buy Tribune Media. ("Disgraceful!" he wrote on Twitter.)
So the president's silence on this one has led to hushed questions among a cadre of executives, bankers, lawyers and lobbyists who have blanketed Washington this summer trying to turn the ear of regulators and policymakers: What does he actually think? And, despite the White House's repeated insistence that Mr. Trump has no involvement in approving such deals, is he exerting any influence behind the scenes?
We will not know the president's position until he tells us. But perhaps the most important voice we've heard from so far has come from the head of the Justice Department's antitrust division, Makan Delrahim. He was asked directly in June about how many telecom companies there should be to have a competitive industry.
His answer? "I don't think there's any magical number that I'm smart enough to glean."
Absent a telling tweet from the president, that is as close as we've heard to a position from the government. And in this case, it sounds like the right answer.