T-Mobile and Sprint: Don't pop the champagne quite yet

Before smartphones, e-commerce or the cloud, the Seattle area was a center of what was quaintly called the cellular telephone industry.

T-Mobile grew out of a spinoff of one of the region's early players, Western Wireless, which was snapped up by Deutsche Telekom. The German owner has been trying to sell T-Mobile for as long as I can remember.

Now comes a tentative deal to merge with Sprint, founded by the Southern Pacific railroad in the 1970s as a gambit around the then-monopoly of old Ma Bell.

The $26.5 billion deal would create a giant with 125 million customers.

If approved by regulators, the combination would leave the United States with three giant carriers — the others being AT&T and Verizon — in an age where every face is seemingly transfixed on a smartphone. In 2003, Americans could pick from six national carriers.

The Obama administration stopped such a deal in 2014, concerned about too much market concentration, along with fewer choices and higher prices for customers.

A Trump administration, carrying on decades of lax Republican antitrust policies, is more likely to give the go-ahead.

Losers would abound. The 6,000 well-paid jobs at Sprint's suburban Kansas City headquarters would be at high risk. Sprint and T-Mobile retail shops would be "rationalized." Cutbacks are one way mergers benefit shareholders — even though most mergers fail to deliver their promises.

The combined entity would have its strings pulled by overseas owners, too. Deutsche Telekom would own 42 percent. Japan's SoftBank, which controls Sprint, would hold 27 percent of the shares.

Even if customers don't pay more — or get locked into more onerous long-term contracts — bigness usually translates into a less dynamic economy. This is why regulators should say no, again.

None of the concerns that torpedoed earlier attempted deals, including the one in 2014, have changed.

Beyond that, economists are beginning to catch on to the connection between mergers and slower job growth and wage stagnation. Today's huge companies, the result of years of anti-competitive mergers, are partly responsible for the slow rate of startups. They use their market power to muscle out, or buy, new entrants — or make entry by newcomers impossible.

Finally, cartels of giant companies — whether banks, airlines or telecom — bring immense lobbying power and outsized political influence to get their way. Keeping regulators and Congress from being "captured" is nearly impossible.

Want to really put America first? Stop this deal. T-Mobile would be left where it was after previous failed mergers: forced to grow organically thanks to superior products, service and innovation.

What a concept.