States Ask Judge to Delay Trial Over T-Mobile, Sprint Deal

(Bloomberg) -- States suing to block T-Mobile US Inc.’s merger with Sprint Corp. said it’s “unlikely” that the U.S. government’s negotiations with the companies to seal the deal will resolve the combination’s allegedly anti-competitive impact on wireless consumers.

The claim was spelled out in a letter Monday asking a federal judge to delay a trial set to begin Oct. 7 in Manhattan. The states claim T-Mobile and Sprint have “failed to satisfy their commitments” to provide details of a possible settlement with the antitrust division of the U.S. Justice Department. The states say they can’t effectively prepare for trial without the information.

“There is no doubt that the settlement would dramatically change the nature of the evidence needed for trial,” a lawyer for 13 states and the District of Columbia said in the letter.

T-Mobile has said the $26.5 billion takeover of Sprint would speed deployment of the next generation of wireless technology known as 5G and lower prices for consumers. The companies claim the states’ suit would to deprive customers of those benefits.

The companies and the Justice Department are negotiating a settlement calling for the carriers to sell assets to Dish Network Corp. with the aim of enabling Dish to become a strong fourth competitor in the wireless market. Justice Department approval would give T-Mobile and Sprint a significant boost as they try to defeat the lawsuit, led by New York Attorney General Letitia James and her California counterpart, Xavier Becerra.

The states argue the tie-up of the No. 3 and No. 4 wireless carriers in the U.S. will harm competition and lead to higher prices.

All sides agreed to an October trial after they struck a deal in June that requires T-Mobile and Sprint to keep the states informed of any changes to the proposed merger so they wouldn’t be caught off guard. The states said they initially wanted a December trial but agreed to speed it up based on the companies’ commitments.

Read More: T-Mobile Says States’ Sprint Suit Threatens Deal Benefits

In the letter, the states said T-Mobile and Sprint had “made it clear” they would use the terms of a possible settlement with the Justice Department as part of their defense.

“In other words, rather than defend the merger as proposed, they will defend the merger as modified by potential divestitures, commitments, penalties, and other features of the USDOJ settlement they hope to negotiate in the future,” the states said.

George Cary, a lawyer for T-Mobile, and Steven Sunshine, Sprint’s lawyer, didn’t immediately return calls for comment.

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, Joe Schneider

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