Boost Mobile Founder Met DOJ Friday on T-Mobile-Sprint Deal

(Bloomberg) -- The Justice Department met Friday with the founder of Boost Mobile to discuss his views for how to set up a new wireless competitor that would resolve the U.S.’s concerns about T-Mobile US Inc.’s proposed acquisition of Sprint Corp.

Peter Adderton, who’s interested in bidding for the prepaid wireless brand now owned by Sprint, said in an interview that he outlined steps the department’s antitrust division needs to take to ensure Boost can be a successful competitor in the market.

T-Mobile and Sprint are in talks with the Justice Department about structuring an antitrust settlement that would allow their $26.5 billion deal to proceed. The carriers have won backing from the chairman of the Federal Communications Commission after they agreed to sell Sprint’s Boost prepaid brand, build an advanced 5G network over three years, and pledge not to raise prices while the network is being constructed.

Those commitments don’t go far enough to resolve concerns from the Justice Department’s antitrust division that uniting the No. 3 and 4 wireless carriers will harm competition and raise prices for consumers, a personal familiar with the review has said. A spokesman for the Justice Department didn’t immediately comment about Adderton’s meeting.

Adderton said that the Justice Department needs to ensure that Boost has a favorable agreement with the combined T-Mobile and Sprint to buy access to the bigger carrier’s network. He has offered to work with T-Mobile to help structure such a deal before Boost is sold.

Critics of the FCC agreement say that because Boost won’t have its own network after the spinoff and would need to rely on T-Mobile’s, it can’t be a real competitor. The Justice Department and the FCC should only approve the merger based on the terms of the network agreement and the buyer of the Boost brand, Adderton said.

“I genuinely believe the staff at the DOJ we met with share the same concerns we do,” he said. It’s “critical” for millions of low-income customers who rely on prepaid wireless plans that the government ensures Boost can be truly competitive once divested, Adderton said.

To contact the reporters on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net;Nabila Ahmed in New York at nahmed54@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, ;Liana Baker at lbaker75@bloomberg.net, Mark Niquette

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