DOJ, FCC argue in favor of T-Mobile-Sprint merger

The country’s top antitrust enforcers on Friday argued in favor of the $26 billion merger of T-Mobile and Sprint, arguing the states attempting to block the enormous telecom deal could wind up harming customers across the country. 

In a legal filing on Friday, the Department of Justice (DOJ) and the Federal Communications Commission (FCC) claimed they have already secured a deal that would allow T-Mobile and Sprint to merge while ensuring there is adequate competition in the telecommunications marketplace. They said the New York federal court will have to weigh whether it’s better for consumers to undo all of the commitments that the government has already secured from the companies. 

The DOJ and FCC both green-lit the deal this year, but the merger is facing one final obstacle from a coalition of 14 state attorneys general. They argue the merger should not be allowed to move forward because combining two of the top four mobile carriers in the country could drive up prices for consumers and result in an unhealthily concentrated market. 

The agencies were largely expected to file papers on behalf of the deal after securing a slew of commitments from the companies, including a promise that T-Mobile will help stand up a fourth carrier and that the merged company will dedicate significant resources to build next-generation wireless networks, also known as 5G.

“A group of thirteen states and the District of Columbia (the “Litigating States”) seek to block the merger in its entirety,” the filing reads. “In doing so, they ask this court to undo the benefits of the relief secured by the Antitrust Division … and the FCC.” The agencies argued the state attorneys general “face a high bar in their challenge.”

In particular, the DOJ and FCC are claiming that blocking the proposed merger at this point could harm rural carriers, who could reap significant benefits from the efforts to build 5G. 

The case is currently playing out in a New York federal court, where a judge has spent two weeks hearing from telecom executives, economists and the states. 

Text messages revealed over the course of the trial this month have revealed that the country’s top antitrust enforcer, Makan Delrahim, was heavily involved in trying to secure the T-Mobile and Sprint merger, and at one point urged company executives to connect with members of Congress to lobby the FCC on behalf of the deal.

The states have maintained that allowing the third- and fourth-largest mobile carriers in the country to merge will result in higher phone bills, particularly for those from low-income communities of color.