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| T-Mobile-Sprint Merger Is Approved by Justice Dept., Clearing Major Hurdle | T-Mobile-Sprint Merger Is Approved by Justice Dept., Clearing Major Hurdle |
| (32 minutes later) | |
| The Justice Department on Friday approved the merger of T-Mobile and Sprint, the third- and fourth-largest wireless companies in the United States, saying its antitrust concerns had been addressed and giving its blessing to a deal that would reshape the nation’s wireless industry. | The Justice Department on Friday approved the merger of T-Mobile and Sprint, the third- and fourth-largest wireless companies in the United States, saying its antitrust concerns had been addressed and giving its blessing to a deal that would reshape the nation’s wireless industry. |
| Critics of the merger have said it would reduce competition by lowering the number of wireless carriers from four to three, resulting in higher cellphone bills. On Friday, those critics, a group that includes attorneys general from several states and Democratic presidential candidates, continued to voice their objections to the deal, saying the combination would harm consumers. | Critics of the merger have said it would reduce competition by lowering the number of wireless carriers from four to three, resulting in higher cellphone bills. On Friday, those critics, a group that includes attorneys general from several states and Democratic presidential candidates, continued to voice their objections to the deal, saying the combination would harm consumers. |
| Until recently, the Justice Department shared those concerns. In a news briefing on Friday, Makan Delrahim, the Trump administration’s top antitrust regulator, said the agency had only decided to approve the deal after T-Mobile and Sprint agreed last week to sell off significant portions of their businesses to the pay-television operator Dish Network as part of a plan to create a potential new major wireless company. Under the agreement’s terms, Mr. Delrahim said, “Dish is in a unique position to succeed.” | Until recently, the Justice Department shared those concerns. In a news briefing on Friday, Makan Delrahim, the Trump administration’s top antitrust regulator, said the agency had only decided to approve the deal after T-Mobile and Sprint agreed last week to sell off significant portions of their businesses to the pay-television operator Dish Network as part of a plan to create a potential new major wireless company. Under the agreement’s terms, Mr. Delrahim said, “Dish is in a unique position to succeed.” |
| The merger deal’s terms call for T-Mobile, the larger of the two companies, to effectively buy Sprint in an all-stock transaction valued at $26.5 billion. The combined company, to be called T-Mobile and led by T-Mobile’s chief executive, John Legere, would be a formidable rival to AT&T, the largest wireless carrier in the country, and Verizon, the second-largest. | The merger deal’s terms call for T-Mobile, the larger of the two companies, to effectively buy Sprint in an all-stock transaction valued at $26.5 billion. The combined company, to be called T-Mobile and led by T-Mobile’s chief executive, John Legere, would be a formidable rival to AT&T, the largest wireless carrier in the country, and Verizon, the second-largest. |
| Before getting the Justice Department’s approval, T-Mobile and Sprint took steps to win over the Federal Communications Commission, which oversees the telecommunications industry. In May, Ajit Pai, the commission’s chairman, signaled his support after the companies committed to investing heavily in rural broadband service and the fifth-generation cellular networks known as 5G, which brings faster-than-broadband speeds through the air. | Before getting the Justice Department’s approval, T-Mobile and Sprint took steps to win over the Federal Communications Commission, which oversees the telecommunications industry. In May, Ajit Pai, the commission’s chairman, signaled his support after the companies committed to investing heavily in rural broadband service and the fifth-generation cellular networks known as 5G, which brings faster-than-broadband speeds through the air. |
| In addition to extending reliable internet access to rural areas, 5G is expected to fuel the development of autonomous cars and other so-called moonshot projects. President Trump has argued that the technology is critical to national security, citing its importance in his administration’s crackdown on the Chinese telecommunications giant Huawei. T-Mobile and Sprint have said they would have a more difficult time making progress with 5G as separate businesses than they would as one entity. | In addition to extending reliable internet access to rural areas, 5G is expected to fuel the development of autonomous cars and other so-called moonshot projects. President Trump has argued that the technology is critical to national security, citing its importance in his administration’s crackdown on the Chinese telecommunications giant Huawei. T-Mobile and Sprint have said they would have a more difficult time making progress with 5G as separate businesses than they would as one entity. |
| Although the Justice Department’s approval was a crucial step forward for the merger, it is not a done deal. In a rare move last month, the attorneys general of 13 states and the District of Columbia threw a significant obstacle in its path when they sued to block the transaction. | Although the Justice Department’s approval was a crucial step forward for the merger, it is not a done deal. In a rare move last month, the attorneys general of 13 states and the District of Columbia threw a significant obstacle in its path when they sued to block the transaction. |
| On a conference call on Friday, Letitia James, the New York attorney general, said the plan to transform Dish into a fourth major wireless carrier was not realistic. | On a conference call on Friday, Letitia James, the New York attorney general, said the plan to transform Dish into a fourth major wireless carrier was not realistic. |
| “Dish has never owned any kind of mobile wireless business,” she said. “Dish has no experience building or operating a nationwide mobile wireless network.” Ms. James added that the agreement brokered by the Justice Department would hurt consumers and “violates antitrust laws.” | “Dish has never owned any kind of mobile wireless business,” she said. “Dish has no experience building or operating a nationwide mobile wireless network.” Ms. James added that the agreement brokered by the Justice Department would hurt consumers and “violates antitrust laws.” |
| T-Mobile and Sprint have reached a $5 billion agreement to give Dish Sprint’s prepaid wireless businesses, including Boost Mobile, which is popular with lower-income customers, and some of its airwaves, known as spectrum. | T-Mobile and Sprint have reached a $5 billion agreement to give Dish Sprint’s prepaid wireless businesses, including Boost Mobile, which is popular with lower-income customers, and some of its airwaves, known as spectrum. |
| Critics have contended that Dish would not be a legitimate competitor to the merged companies because it would only have about nine million customers and its wireless service would have to operate on T-Mobile’s network, generating more revenue for T-Mobile. | Critics have contended that Dish would not be a legitimate competitor to the merged companies because it would only have about nine million customers and its wireless service would have to operate on T-Mobile’s network, generating more revenue for T-Mobile. |
| Dish said it plans to create a fully owned network, but building the infrastructure for it would be expensive, and Dish has been losing subscribers steadily to cheaper streaming services. | |
| Mr. Delrahim said he would have supported the lawsuit filed by the state attorneys general if the two companies had not agreed to the Dish deal. “Without the remedy,” he said on Friday, “we would agree with the states that this deal should be blocked.” | Mr. Delrahim said he would have supported the lawsuit filed by the state attorneys general if the two companies had not agreed to the Dish deal. “Without the remedy,” he said on Friday, “we would agree with the states that this deal should be blocked.” |
| Mr. Legere, T-Mobile’s leader, has been the merger’s primary pitchman, lobbying legislators and promoting the deal to his 6.2 million Twitter followers. T-Mobile’s majority owner, the German telecommunications giant Deutsche Telekom, would own a significant stake in the merged business. | Mr. Legere, T-Mobile’s leader, has been the merger’s primary pitchman, lobbying legislators and promoting the deal to his 6.2 million Twitter followers. T-Mobile’s majority owner, the German telecommunications giant Deutsche Telekom, would own a significant stake in the merged business. |
| Mr. Legere, 61, and his counterpart at Sprint, the executive chairman Marcelo Claure, 48, were once bitter rivals who frequently took shots at each other in television ads and on social media. They embarked on a lobbying offensive more than a year ago, after announcing that they had reached a deal to bring the two companies together. | Mr. Legere, 61, and his counterpart at Sprint, the executive chairman Marcelo Claure, 48, were once bitter rivals who frequently took shots at each other in television ads and on social media. They embarked on a lobbying offensive more than a year ago, after announcing that they had reached a deal to bring the two companies together. |
| [T-Mobile and Sprint attacked each other for years before they decided to team up.] | [T-Mobile and Sprint attacked each other for years before they decided to team up.] |
| Mr. Legere made numerous visits to both the F.C.C. and the Justice Department, documenting his activity on social media. A month after the deal was announced, Mr. Claure was a host of a fund-raiser for Representative Marsha Blackburn, a Tennessee Republican who was running for Senate. Ms. Blackburn, a longtime supporter of the telecommunications industry, was elected to the Senate in November. | Mr. Legere made numerous visits to both the F.C.C. and the Justice Department, documenting his activity on social media. A month after the deal was announced, Mr. Claure was a host of a fund-raiser for Representative Marsha Blackburn, a Tennessee Republican who was running for Senate. Ms. Blackburn, a longtime supporter of the telecommunications industry, was elected to the Senate in November. |
| Several lawmakers expressed misgivings over Mr. Legere’s Washington visits, noting the dozens of times that he and other T-Mobile executives have stayed at the Trump International Hotel there. The companies have denied doing anything inappropriate to curry favor with federal officials. | Several lawmakers expressed misgivings over Mr. Legere’s Washington visits, noting the dozens of times that he and other T-Mobile executives have stayed at the Trump International Hotel there. The companies have denied doing anything inappropriate to curry favor with federal officials. |
| If the deal is completed, it would be a victory for the billionaire entrepreneur Masayoshi Son, whose SoftBank investment group owns a controlling interest in Sprint, a company with debts of $40 billion. Mr. Son has been trying to unload the troubled carrier for years. | If the deal is completed, it would be a victory for the billionaire entrepreneur Masayoshi Son, whose SoftBank investment group owns a controlling interest in Sprint, a company with debts of $40 billion. Mr. Son has been trying to unload the troubled carrier for years. |
| In December 2016, Mr. Son met with Mr. Trump, who was then the president-elect, at Trump Tower and pledged to invest some $50 billion in the United States in an initiative that would create 50,000 jobs. In February, SoftBank executives held discussions in Washington with members of the president’s economics team. | In December 2016, Mr. Son met with Mr. Trump, who was then the president-elect, at Trump Tower and pledged to invest some $50 billion in the United States in an initiative that would create 50,000 jobs. In February, SoftBank executives held discussions in Washington with members of the president’s economics team. |
| The Justice Department’s approval of the merger relies on the future actions of Dish, a company with a history of violations that is controlled by the billionaire Charles Ergen, an expert poker player and tough negotiator. Dish would face millions of dollars in fines if it failed to build out its cellular service, Mr. Delrahim said. | The Justice Department’s approval of the merger relies on the future actions of Dish, a company with a history of violations that is controlled by the billionaire Charles Ergen, an expert poker player and tough negotiator. Dish would face millions of dollars in fines if it failed to build out its cellular service, Mr. Delrahim said. |
| In a statement on Friday, Dish said it would voluntarily pay a fine of up to $2.2 billion if it failed to deploy a 5G network covering at least 70 percent of the country’s population in the next four years. | In a statement on Friday, Dish said it would voluntarily pay a fine of up to $2.2 billion if it failed to deploy a 5G network covering at least 70 percent of the country’s population in the next four years. |
| The Justice Department and the F.C.C. will monitor Dish to ensure that it adheres to the agreement, amounting to what is known as a behavioral remedy under which federal regulators watch over a for-profit business. In assessing previous merger deals, Mr. Delrahim has criticized such arrangements. On Friday, he said the agencies’ oversight of Dish did not amount to a behavioral remedy, largely because they will track Dish’s initial build-out of a wireless network and then step away after it starts operating. | The Justice Department and the F.C.C. will monitor Dish to ensure that it adheres to the agreement, amounting to what is known as a behavioral remedy under which federal regulators watch over a for-profit business. In assessing previous merger deals, Mr. Delrahim has criticized such arrangements. On Friday, he said the agencies’ oversight of Dish did not amount to a behavioral remedy, largely because they will track Dish’s initial build-out of a wireless network and then step away after it starts operating. |
| Just as the plan to make Dish into a major wireless provider did not satisfy the state attorneys general, it did not allay the concerns of Senator Amy Klobuchar of Minnesota, a Democratic candidate for president. In a statement on Friday, she said the agreement did not do enough to protect consumers and failed to address the issues she had raised with the Justice Department when it was first announced. | Just as the plan to make Dish into a major wireless provider did not satisfy the state attorneys general, it did not allay the concerns of Senator Amy Klobuchar of Minnesota, a Democratic candidate for president. In a statement on Friday, she said the agreement did not do enough to protect consumers and failed to address the issues she had raised with the Justice Department when it was first announced. |
| “It looked like a bad deal then, and it looks like a bad deal today, despite the parties’ promises and this proposed consent decree,” she said. | “It looked like a bad deal then, and it looks like a bad deal today, despite the parties’ promises and this proposed consent decree,” she said. |
| Mr. Delrahim has reviewed a flurry of mergers since moving into the top antitrust job in 2017. He sued AT&T, unsuccessfully, to block it from buying Time Warner. Around the same time, he approved the Walt Disney Company’s deal to acquire the bulk of Rupert Murdoch’s 21st Century Fox a scant six months after the transaction was announced. It was a speedy turnaround for an acquisition that would normally take at least a year. | Mr. Delrahim has reviewed a flurry of mergers since moving into the top antitrust job in 2017. He sued AT&T, unsuccessfully, to block it from buying Time Warner. Around the same time, he approved the Walt Disney Company’s deal to acquire the bulk of Rupert Murdoch’s 21st Century Fox a scant six months after the transaction was announced. It was a speedy turnaround for an acquisition that would normally take at least a year. |