U.S. Says Blocking the T-Mobile-Sprint Deal Would Harm Consumers

(Bloomberg) -- The Trump administration came to the defense of T-Mobile US Inc. in its fight to buy Sprint Corp., telling a judge overseeing an antitrust lawsuit brought by several states that blocking the $26.5 billion merger would harm consumers.

The Justice Department’s antitrust division and the independent Federal Communications Commission said in a joint court filing Friday that their approval of the merger, which will set up Dish Network Corp. as a new wireless carrier in the market, will benefit the public.

“A nationwide injunction would block not only the transaction, but also the substantial, long-term, and pro-competitive benefits for American consumers the antitrust division and the FCC concluded will flow from the merger and the relief each secured,” they said.

The agencies’ filing came at the end of a two-week trial in Manhattan over the states’ lawsuit against the wireless merger. The states say the tie-up, which will combine the No. 3 and No. 4 carriers, will eliminate competition between the companies and lead to higher prices.

U.S. District Judge Victor Marrero will decide on the merger without a jury.

The Justice Department and the FCC approved the merger earlier this year after engineering a remedy that would require the companies to sell assets to Dish, allowing it to enter the market and build a new wireless network.

The press offices of the attorneys general of New York and California, who are leading the lawsuit, declined to comment on the agencies’ filing, as did representatives of T-Mobile, Sprint and Dish.

The Justice Department and the FCC told Marrero the injunction sought in the lawsuit would especially harm rural customers, 85% of whom will be covered by next-generation 5G wireless technology within three years under an agreement between the companies and the regulators to seal the deal.

The states that sued disproportionately represent urban areas, while the attorneys general from states with more rural areas have supported the merger. Texas, Nevada and Mississippi, which had been part of the lawsuit, settled with the wireless companies before the trial started.

“The litigating states’ lack of a nationwide interest is of special concern here because the challenged merger would combine two nationwide cellular networks that serve customers in every state,” the filing says.

©2019 Bloomberg L.P.

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