ADVERTISEMENT

T-Mobile’s Sprint Deal Still Faces Trial With Dubious States

T-Mobile’s Sprint Deal Hasn’t Won Over States That Sued

(Bloomberg) -- States that sued to block T-Mobile US Inc.’s acquisition of Sprint Corp. signaled they aren’t giving up, even after the U.S. antitrust regulator blessed the $26.5 billion deal.

New York Attorney General Letitia James, who’s co-leading the lawsuit filed in June, cast doubt on the centerpiece of the companies’ settlement with the government: the sale of assets to Dish Network Corp. to help create a new provider of wireless services and preserve competition.

“T-Mobile and Sprint are asking Americans to trust that this new mega corporation will act directly against its own economic interests by helping transform Dish into an independent competitor that rivals this new company,” James said in a statement.

Fourteen states and the District of Columbia sued to block the tie-up, arguing that merging two of the four biggest U.S. mobile-network operators would harm customers by reducing access to affordable and reliable wireless service. Lower-income and minority communities would be hit hardest, they said.

A trial is set for Oct. 7, and the merger won’t be completed until after the lawsuit is resolved. The states said they may amend the lawsuit to address the details of the settlement agreement.

Assistant Attorney General Makan Delrahim, who heads the Justice Department’s antitrust division, suggested he may file a brief in the New York case. "We would be happy to provide our views and our perspective to this," he said Friday.

Maryland Attorney General Brian Frosh called the addition of Dish “a fig leaf that doesn’t cover up the ugly parts of the proposed Sprint/T-Mobile merger.”

California Attorney General Xavier Becerra, who is co-leading the suit with James, said he’s still concerned about fewer competitors and increased costs.

“We intend to be prepared to go to trial to fight for a fair, competitive and equitable marketplace for consumers nationwide,” Becerra said in a statement Friday.

T-Mobile and Sprint agreed to sell multiple assets to Dish as a condition for approval, the Justice Department said earlier Friday. The carriers have promised to deploy a 5G network that would cover 97% of the U.S. population within three years and 99% within six years.

Dish has never shown “any inclination or ability” to build a national mobile network on its own, and the company has broken numerous assurances it gave to the U.S. Federal Communication Commission about deployment of its spectrum, according to the statement from James’s office.

New York sent a letter to the judge on Thursday saying T-Mobile has refused to turn over needed documents “that go to the heart of this merger challenge,” including certain internal discussions regarding talks with the Justice Department and the FCC.

The states speculated that the communications could "reveal that certain operational terms of their agreements with Dish are designed to hobble Dish as a meaningful competitor."

T-Mobile had no immediate comment on the states’ suit, while Sprint and Dish didn’t respond to requests for comment.

--With assistance from David McLaughlin and Olga Kharif.

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Steve Stroth, Joe Schneider

©2019 Bloomberg L.P.