T-Mobile Takes Over Sprint as Judge OKs Settlement

WASHINGTON (CN) — A federal judge entered final judgment Wednesday in a case over the $26.5 billion merger of T-Mobile and Sprint, finalizing a settlement agreement with the federal government that requires the companies to sell off some of Sprint’s assets to Dish Network.

The entry of final judgment from U.S. District Judge Timothy Kelly comes on the same day the two telecom giants announced they had formally completed the merger, bringing together two of the largest wireless carriers in the United States two years after the deal was first announced.

A woman using a cellphone walks past T-Mobile and Sprint stores in New York in 2010. (AP Photo/Mark Lennihan)

Consumer advocates have warned the merger could consolidate the wireless market and lead to higher prices, though the companies promise a faster, more innovative network.

The federal government, joined by 10 states, filed an antitrust suit last July, claiming the terms of the merger would have strong anti-competitive impacts.  But the Trump administration and states at the same time filed a consent decree that would allow the merger to go forward so long as the companies first dropped Sprint’s prepaid wireless operations.

Kelly’s judgment on Wednesday allows that agreement to take effect.

“Based upon the record before the court, which includes the competitive impact statement and any comments and responses to comments filed with the court, entry of this final judgment is in the public interest,” the Washington-based judge wrote.

Under Kelly’s order, T-Mobile and Sprint will sell-off Sprint’s prepaid brands, such as Boost Mobile, to Dish Network. Also included in the deal are some 20,000 cell sites and hundreds of retail stores.

In addition, T-Mobile will give Dish access to networks for seven years, during which time Dish will develop its own 5G network.

“The T-Mobile/Sprint transaction, as remedied by the Department of Justice, will combine T-Mobile’s and Sprint’s complementary spectrum assets while preserving competition,” Assistant Attorney General Makan Delrahim, with the Justice Department’s Antitrust Division, said in a statement. “Our settlement promises to expand output further by bringing Dish’s extensive spectrum holdings to the market. The end result will be strengthened competition with high-quality 5G networks that will benefit American consumers nationwide.” 

In February, a federal judge in New York City rejected a parallel challenge to the merger from New York, California, Illinois and 10 other states and Washington, D.C., that argued the proposal would choke competition and potentially increase prices.

Alex Harman, a competition policy advocate at government watchdog group Public Citizen, shared similar concerns about the effects of the merger on Wednesday.

“This merger will prove to be bad for consumers and innovation,” Harman said in a statement. “Reducing competition will result in lower quality service at a higher price and relying on Dish to enter the wireless market and provide competition will prove to be a failure and too little too late. This merger should have been blocked, but instead it was actively assisted by the compromised Trump Justice Department.”

In his characterization of the Justice Department, Harman was referring to text messages revealed in the New York case that showed Delrahim taking steps behind the scenes to help the companies clear antitrust concerns.

T-Mobile and Sprint are two of the largest wireless providers in the United States, with T-Mobile posting $43 billion in revenue in 2018 and Sprint bringing in $32 billion in the same year.

T-Mobile, which is absorbing Sprint in the merger, did not immediately return a request for comment.

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