By Jeffrey May, J.D.
Settlement now backed by U.S. Department of Justice along with seven states. Seventeen other states and the District of Columbia continue to move forward with suit to block the deal, which is set for trial in December.
Florida Attorney General Ashley Moody announced today that the State of Florida is signing on to a proposed final judgment intended to resolve antitrust concerns over proposed merger of T-Mobile and Sprint. Florida joins Kansas, Louisiana, Nebraska, Ohio, Oklahoma, and South Dakota, as well as the U.S. Department of Justice, in the settlement. In July, the U.S. Department of Justice announced that, along with five states, it had reached a settlement resolving competition concerns over the combination of two of the four national facilities-based mobile wireless carriers in the United States. A second amended complaint has been filed in the federal district court in Washington, D.C., where the proposed final judgment is awaiting approval (U.S. v. Deutsche Telekom AG, Case No. 1:19-cv-02232-TJK).
"Florida has been one of the states leading this investigation since the beginning, and I am pleased that they have chosen to join our settlement after completing their thorough review," said Makan Delrahim, Assistant Attorney General in charge of the Department of Justice Antitrust Division, in response to Florida’s decision. "The merger, with the divestitures, will strengthen competition for high-quality 5G networks that will benefit Floridians and American consumers nationwide."
The terms of the proposed final judgment were not changed by the addition of Florida as a plaintiff. However, Florida’s attorney general has secured state-specific commitments from T-Mobile "in addition to the substantial commitments given to the DOJ and FCC," according to the statement. Moody noted price freezes and 5G network build-out among other commitments.
The proposed final judgment, which Florida joined today, includes a substantial divestiture package that is intended to enable a viable facilities-based competitor to enter the market. That competitor would be satellite television provider DISH Network. The settlement also is intended to facilitate the expeditious deployment of multiple high-quality 5G networks. T-Mobile and Sprint have argued that the merger is necessary to bring 5G wireless services to consumers. In addition, they have said that the merger will place them in a better position to compete with the duopoly that is AT&T and Verizon.
In August, FCC Chair Ajit Pai recommended approval of the deal subject to certain conditions. Regulatory approval remains pending. Congressional Democrats have called for the agency to slow down its move to clear the transaction and seek additional comments on its impact.
State suit opposing deal. While Florida’s support for the settlement is significant and FCC approval appears likely, a separate multi-state antitrust suit that has been filed to block the merger could complicate matters. Seventeen states and the District of Columbia are prepared for a trial scheduled for December in the federal district court in New York City. Support for this challenge has continued to grow since the action was first filed in June. The State of Pennsylvania was added as a plaintiff last month. These states contend that the proposed final judgment does not resolve the harms to competition that will result if the merger proceeds (New York v. Deutsche Telekom AG, Case No. 1:19-cv-05434-VM-RWL).
Attorneys: Frederick S. Young for U.S. Department of Justice. Lizabeth A. Brady for State of Florida. Steven C. Sunshine and Julia K. York (Skadden, Arps, Slate, Meagher & Flom LLP) for Sprint Corp.
Companies: Deutsche Telekom AG; DISH Network Corp.; Sprint Corp.; T-Mobile US, Inc.
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