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T-Mobile and Sprint react to the states' reaction to the DOJ's court filing last month

Posted January 14, 2020 | Mobile | News


T-Mobile and Sprint worked pretty hard for a fairly long time behind the scenes to convince the US Department of Justice and Federal Communications Commission that the $26.5 billion mega deal aiming to combine the nation’s third and fourth-largest wireless service providers would actually be good for the industry as a whole rather than harm competition and potentially lead to higher prices for consumers.

But once the two government agencies decided to give the merger the go-ahead, they became not just the most influential supporters of a major “New T-Mobile” player in a consolidated carrier landscape, but also among the most vocal advocates for the necessity of the deal’s final approval. Said approval lies in the hands of Victor Marrero, a federal judge presiding over a lawsuit filed by 13 state AGs and the Attorney General for the District of Columbia in a New York court.

The legal quarrel continues

Just one day before the testimony phase of the litigation ended on December 20, the DOJ and FCC voiced their support for the highly publicized (and supremely contentious) merger yet again by filing papers with the court in which they mainly argued that the states looking to block the deal lack the “nationwide perspective to their analysis of the transaction” that only the federal government can bring to the table.

 

In other words, the states were essentially accused of putting local goals and views above national interests and benefits purportedly stemming from the merger. Unsurprisingly, we didn’t have to wait too long for a reaction, which came in a court filing last week in anticipation of closing arguments scheduled for this week. Said filing turned the tables on the Trump administration, which was denounced for green-lighting the merger without carefully and rigorously examining its own approval conditions, as well as in contrast to past views on similar matters.
As such, the New York and California-led group of states challenging the merger basically asked Judge Marrero to ignore the DOJ and FCC’s position in casting his verdict sometime next month. But of course, the legal saga is far from over, as T-Mobile and Sprint are now jumping to the defense of the Department of Justice and Federal Communications Commission in a new court filing.

The transaction was “actively” reviewed and cleared based on the proper legal standards

That’s at least what T-Mobile and Sprint are arguing in response to the states’ own response to the DOJ and FCC’s joint filing last month, highlighting the key role played by Dish in scoring the two federal regulatory approvals. Dish, remember, is essentially supposed to take Sprint’s place after acquiring its consolidated prepaid operations and $3.6 billion worth of spectrum.

That separate deal is itself frozen until Judge Marrero announces his verdict, and T-Mobile and Sprint are pointing the finger at their opposers for calling the plan to turn Dish into the industry’s number four player inadequate “before it was even finalized.”

The two carriers looking to become one want the court to give the Trump administration “proper weight”, emphasizing that as the national enforcer of antitrust laws, the DOJ “actively reviewed” the deal, concluding the “transaction as modified yielded significant efficiencies that would result in lower prices and higher quality for consumers.” 

Interestingly, an attorney general from a state that’s not directly involved in this convoluted legal battle also filed papers on Monday challenging the argument used by the DOJ in its conflict with the states that are a party to the high-profile lawsuit. 

Washington’s Bob Ferguson claims that the Department of Justice essentially suggests its position on an antitrust matter cannot be challenged at the state level. Ferguson further argues that the DOJ has “no authority for this assertion”, although in the grand scheme of the pending merger between T-Mobile and Sprint, this issue seems largely irrelevant.



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