Top Stories
Top Stories

UPDATE 1-T-Mobile, Sprint chiefs to defend deal on Capitol Hill, again

(Adds comment from congressional Democrats)

WASHINGTON, March 12 (Reuters) - The chief executives of T-Mobile US Inc and Sprint Corp, which are seeking to merge, testify on Capitol Hill on Tuesday to defend their planned $26 billion deal.

T-Mobile Chief Executive John Legere and Marcelo Claure, executive chairman of Sprint, are the stars among the six witnesses who testify before the House of Representatives Judiciary Committee's antitrust subcommittee.

Legere defended the proposed transaction by saying that a combined Sprint and T-Mobile would create a stronger company that would better compete with industry leaders AT&T Inc and Verizon Communications Inc.

"We will bring these benefits to parts of the United States that other larger wireless carriers and cable companies often ignore such as rural America and lower-income communities," he said in written testimony released in advance of the hearing.

Two powerful House Democrats expressed concern about the agreement to combine the No. 3 and No. 4 U.S. wireless carriers, which was struck in April.

Representative David Cicciline, chair of the antitrust panel, noted that both companies had competed hard against their bigger rivals. "I am deeply skeptical that consolidation is the path forward to lowering prices, increasing opportunity, or unleashing competition," he added.

Representative Jerrold Nadler, chair of the full committee, said he was concerned about the companies' dominance of prepaid plans, usually used by people who are poorer or have bad credit.

"Because the proposed transaction would also consolidate the market for these services, it may have disproportionately negative effect on low-income households," he said.

The deal needs approval from the Justice Department and the Federal Communications Commission.

It had been contemplated several years ago, but officials in President Barack Obama's administration urged the companies to drop the idea, which they did.

The deal is unpopular with some lawmakers. Eight progressive senators signed a letter asking the Trump administration to reject the deal, including presidential candidates Bernie Sanders, Amy Klobuchar and Elizabeth Warren.

To win support for the deal, T-Mobile previously said it would not increase prices for three years. Sprint said it hopes to complete the regulatory approval process by the end of June.

Lawmakers were expected to ask about a report that Legere and other company leaders have spent $195,000 on hotel stays and other expenses at the Trump International Hotel in Washington since the company sought approval for the deal.

Asked on Twitter where he was staying, Legere said, "Trump Hotel? No. I'm staying at the Willard."

The FCC said last week that it had halted the informal 180-day "shot clock" on the merger review to give the public more time to comment on significant new information from the companies. It said it expects to resume the "shot clock," at the current Day 122 on April 4.

The deal has run into criticism from unions, consumer advocates and rural operators. The Communications Workers of America has said the deal will eliminate tens of thousands of jobs.

Last month at a congressional hearing, House Democrats raised worries about the deal because the U.S. wireless market has just four main carriers. (Reporting by Diane Bartz; editing by Jonathan Oatis)