Several state attorneys general are set to file a lawsuit seeking to block T-Mobile's proposed takeover of Sprint on antitrust grounds. The effort, led by New York AG Letitia James, represents the latest headache for the carriers as they seek to unite and do battle with AT&T and Verizon. Even if the Justice Department eventually gives the deal its blessing, a federal judge could side with the states and prevent the merger.
According to the lawsuit, eliminating competition between T-Mobile and Sprint could result in $4.5 billion of yearly price increases for consumers. That's just for customers of the new T-Mobile, too. The lawsuit also speculates that AT&T and Verizon could raise their prices in response to the loss of a fourth carrier.
The carriers announced the proposed merger more than a year ago, presumably expecting the current regulatory environment to be more friendly than in past years. The FCC has gotten on board with the merger, but the Justice Department's Antitrust division is reportedly unhappy with the deal as it currently stands. The agency could demand further concessions before giving its approval, but that could all be for nothing if the state AGs manage to convince a federal judge to block the deal.