Department of Justice Signs off on T-Mobile’s Sprint Takeover, But the Harmful Merger Is Far from a Done Deal

WASHINGTON — On Friday, the Department of Justice’s antitrust division announced its approval of T-Mobile’s $26.5-billion takeover of Sprint. In order to get the deal approved the two carriers have agreed to sell off some assets to DISH Network, including prepaid subsidiaries like Boost Mobile, spectrum licenses and retail stores.

If the merger goes forward, it would leave the United States with only three viable nationwide wireless-service providers even with these divestitures. Approving the merger would crush competition, raise prices and eliminate thousands of jobs, according to union estimates. It would disproportionately harm low-income people and communities of color, who rely on robust competition among T-Mobile and Sprint and their subsidiaries to keep access affordable.

Before finalizing the merger, T-Mobile and Sprint have to contend with attorneys general in 13 states and the District of Columbia who have joined an antitrust suit filed in June to stop the proposed merger. If it succeeds, the states’ lawsuit could prevent the merger from going through because states have full authority to enforce the nation’s antitrust laws.

Free Press Research Director S. Derek Turner made the following statement:

“Justice Department antitrust chief Makan Delrahim has tried to split the baby here by orchestrating a divestiture of Boost — a prepaid brand with no cellular network — to DISH, a satellite-TV company with no wireless customers, and a well-earned reputation for hoarding spectrum.

“In truth, this arrangement does not offer cellphone users a viable fourth competitor in the wireless market. DISH has a troubling history when it comes to delivering wireless services, and it continues to squat on valuable spectrum, a delay that’s earned DISH considerable criticism from both inside and outside the FCC, including from T-Mobile itself before this newly engineered marriage of convenience.

“DISH hasn't made any effort to provide real, consumer-facing wireless services that could offset the high prices of the major players. The company is years and billions of dollars of investment away from doing any such thing, even if it does miraculously start living up to its promises and becomes more than a spectrum warehouse.

“By signing off on this merger, the Justice Department has done nothing to remedy the short- and long-term harms the loss of an independent Sprint will create for U.S. wireless users. Nothing about these divestitures would lower prices for customers. DISH can’t mount a retail operation that’s even close to what Sprint currently offers. And the loss of competition would disproportionately harm low-income people and communities of color.

“It’s clear that DISH never really planned to build a new nationwide carrier from the ground up. DISH executives know that the company benefits its shareholders only by building up a large spectrum portfolio and getting bought out by a larger company. Indeed, some Wall Street analysts are already pushing for Verizon to buy DISH.

“Prior to this last-minute dealmaking, all of the reports were that the Justice Department’s antitrust experts had reached the correct conclusion against approving this deal before being overruled by the political appointee leading the antitrust division. The merger would harm all wireless users through higher prices and diminished competition between the remaining three national carriers.

“But the department’s antitrust chief has succumbed to political pressure from a White House that favors the deal. If the merger goes through, Delrahim will have abandoned his long-held belief that antitrust is a matter of law enforcement, and that conditions don’t magically make illegal mergers legal.

“Fortunately, there are several state attorneys general who have looked at the full record and reached the same conclusion that DoJ staff reportedly reached: This merger is bad for wireless users and can’t be fixed.

“In fact, that’s what DISH’s own economists argued forcefully and correctly in their FCC filings. DISH executives were against this merger before they were for it, and the fact that they’ve carved out a windfall for their company now does nothing to change the analysis they correctly put into the FCC record on this deal’s many harms.

“We look forward to the state AGs trying their case in front of an impartial court. And we’ll continue to fight to stop this dangerous merger from going through.”