Justice Department Welcomes Decision in New York v. Deutsche Telecom, the T-Mobile/Sprint Merger

(STL.News) – Following the trial in New York v. Deutsche Telekom, Judge Victor Marrero of the U.S. District Court for the Southern District of New York has refused a request from a minority of state Attorneys General to block T-Mobile’s proposed acquisition of Sprint.  In his opinion, Judge Marrero cited the Justice Department’s settlement as a key factor, noting that the Justice Department’s settlement made Dish “well poised to become a fourth MNO in the market, and its extensive preparations and regulatory remedies indicate that it can sufficiently replace Sprint’s competitive impact.”

“I am pleased and agree with Judge Marrero’s decision to deny the injunction, and particularly his conclusion that the department’s divestiture and remedy package resolves the competitive concerns in this case,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “This opinion is an important next step toward strengthening competition for high-quality 5G networks that will benefit American consumers nationwide.”

“I am also grateful that the judge recognized the expertise of the Department of Justice and the Federal Communications Commission (FCC) in his evaluation of the transaction.  As I have noted before, should a minority group of states, or even one, be able to undo the nationwide relief secured by the federal government, it would wreak havoc on parties’ ability to merge, on the government’s ability to settle cases, and cause real uncertainty in the market for procompetitive mergers and acquisitions.”

The department’s Antitrust Division filed a civil antitrust lawsuit on July 26, 2019, in the U.S. District Court for the District of Columbia along with a proposed settlement that, if approved by the court, would resolve the department’s competitive concerns.  The Attorneys General for the states of Arkansas, Colorado, Florida, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Dakota, and Texas have each joined in this proposed settlement.  That proposed settlement, along with the United States’ motion to enter final judgment, is pending before Judge Kelly in the U.S. District Court for the District of Columbia.

The FCC also approved the transaction after a thorough examination, with certain commitments as a condition of approval.

Under the terms of the proposed settlement, T-Mobile and Sprint must divest Sprint’s prepaid business, including Boost Mobile, Virgin Mobile, and Sprint prepaid, to Dish Network Corp., a Colorado-based satellite television provider.  The proposed settlement also provides for a divestiture of substantial spectrum assets to Dish.  Additionally, T-Mobile and Sprint must make available for divestiture to Dish at least 20,000 cell sites and hundreds of retail locations.  T-Mobile must also provide Dish with robust access to the T-Mobile network for a period of seven years while Dish transitions the business and builds out its 5G network.

T-Mobile US Inc. is a Delaware corporation headquartered in Bellevue, Washington.  In 2018, T-Mobile posted revenues of more than $43 billion.  Deutsche Telekom AG, a German corporation headquartered in Bonn, Germany, is the controlling shareholder of T-Mobile US Inc.

Sprint Corporation is a Delaware corporation headquartered in Overland Park, Kansas.  In 2018, its posted revenue was over $32 billion.  Sprint is controlled by SoftBank Group Corp., a Japanese corporation headquartered in Tokyo, Japan.

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