By Jeffrey May, J.D.
The combination of T-Mobile USA Inc. and MetroPCS Communications Inc. has been approved by both the Federal Communications Commission (FCC) and the Department of Justice Antitrust Division without divestitures or similar conditions. Today, the FCC released its Memorandum Opinion and Order, finding the transaction to be in the public interest. The Antitrust Division also issued a statement, saying that it had closed its investigation after concluding that the combination was unlikely to harm consumers or substantially lessen competition.
T-Mobile is one of four nationwide providers of mobile wireless services. The three others are AT&T, Verizon, and Sprint.
MetroPCS is the fifth-largest mobile wireless telecommunications provider in the United States; however, it provides services in only certain regions of the country. Each of the markets served by MetroPCS is also served by all four of the national carriers.
Last October, Deutsche Telekom, parent of T-Mobile, and MetroPCS announced that they had signed a definitive agreement to combine T-Mobile and MetroPCS. The parties said the transaction would "create the leading value carrier in the U.S. wireless marketplace."
The announcement of the T-Mobile/MetroPCS deal came less than a year after plans for AT&T Inc. to acquire T-Mobile from Deutsche Telekom were abandoned in the face of a Justice Department challenge. The FCC staff also had concluded that the AT&T/T-Mobile transaction raised a number of potential public interest harms.
Regulators quickly approved this latest deal. The parties announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on March 5. The wireless license transfer between T-Mobile and MetroPCS was approved before the expiration of the FCC's 180-day deadline.
In its statement announcing the closure of its investigation, the Antitrust Division said that it considered whether the proposed combination might tend to lessen competition substantially in any particular local area, for instance by combining the two carriers with the best local coverage. However, it decided that the deal was not likely to lessen competition substantially at local levels.
The Justice Department also noted that many dimensions of competition in the mobile wireless industry take place at a national level, including plan pricing, device offerings, and network technology. "Like many local and regional providers, MetroPCS faces limitations, stemming from its lack of nationwide spectrum, networks and scale, and therefore exerts little influence on these aspects of mobile wireless competition," the Justice Department said.
The Justice Department went on to say that the proposed combination of T-Mobile and MetroPCS might have a procompetitive impact in that it would improve T-Mobile's scale and spectrum position, particularly since MetroPCS's spectrum holdings are compatible with T-Mobile's existing network. In any event, the Justice Department pledged to continue monitoring competition in the mobile wireless industry and to bring enforcement actions where warranted.
FCC Chairman Julius Genachowski said the agency's approval of the transaction "will benefit millions of American consumers and help the U.S maintain the global leadership in mobile it has regained in recent years."
In a statement, T-Mobile President and CEO John Legere said that the company "look[s] forward to completing the transaction and delivering the significant customer and stockholder benefits that this combination will make possible." A special meeting of MetroPCS stockholders to vote on matters relating to the proposed combination is set for April 12.
MainStory: TopStory Antitrust AntitrustDivisionNews
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