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Attorney General Reyes Applauds Decision in Sprint/T-Mobile Case

FOR IMMEDIATE RELEASE
February 27, 2020

ATTORNEY GENERAL SEAN D. REYES APPLAUDS DECISION IN SPRINT/T-MOBILE CASE

Reyes took a leadership role in supporting wider consumer access to 5G Networks

SALT LAKE CITY – Utah Attorney General Sean D. Reyes today applauded a Federal Judge’s decision to allow—not block—the proposed Sprint/T-Mobile merger. The ruling is in response to a lawsuit from a handful of states who claimed the merger violated antitrust laws. But this week’s ruling cites a Justice Department settlement that makes Dish “well poised to become a fourth Mobile Network Operator (MNO) in the market, and its extensive preparations and regulatory remedies indicate that it can sufficiently replace Sprint’s competitive impact.” In addition, the ruling points out that in the current marketplace, Sprint was unlikely to be a viable fourth competitor if the merger wasn’t allowed.

“While many other states looked to block this merger, Utah saw the benefits to consumers, businesses, the marketplace and US competitive advantage in 5G. Early on, I took the lead in this effort because I also recognized this merger was crucial for rural Utah,” Attorney General Reyes said. “There are many parts of our state which don’t have high-quality mobile and internet access, which 5G technology will provide. Judge Marrero’s ruling validates not only Utah’s position but also the arguments of the U.S. Department of Justice and the Federal Communications Commission.”

Reyes continued: “This merger makes sense from all sides. Beyond critical rural development, this deal protects America by keeping certain foreign players from acquiring a weakened Sprint. In terms of market balance, the new, combined entity will still be third in market share behind the two most dominant players. But the merger gives the new entity a fighting chance to develop 5G and compete with AT&T and Verizon long-term and in a serious way. And with the addition of Dish, there is no net loss in the number of market players. Prices, products and services will be more competitive and states like Utah will be much better served as a result.”

This week, Judge Victor Marrero of the U.S. District Court for the Southern District of New York refused a request from a minority of state attorneys general to block T-Mobile’s proposed acquisition of Sprint. The ruling concludes the trial in New York v. Deutsche Telekom.

The department’s Antitrust Division filed a civil antitrust lawsuit on July 26, 2019, in the U.S. District Court for the District of Columbia along with a proposed settlement that, if approved by the court, would resolve the department’s competitive concerns. The attorneys general for the states of Arkansas, Colorado, Florida, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Dakota, and Texas have each joined in this proposed settlement. That proposed settlement, along with the United States’ motion to enter final judgment, is pending before Judge Kelly in the U.S. District Court for the District of Columbia.

The FCC also approved the transaction after a thorough examination, with certain commitments as a condition of approval.

Under the terms of the proposed settlement, T-Mobile and Sprint must divest Sprint’s prepaid business, including Boost Mobile, Virgin Mobile, and Sprint prepaid, to Dish Network Corp., a Colorado-based satellite television provider. The proposed settlement also provides for a divestiture of substantial spectrum assets to Dish. Additionally, T-Mobile and Sprint must make available for divestiture to Dish at least 20,000 cell sites and hundreds of retail locations. T-Mobile must also provide Dish with robust access to the T-Mobile network for a period of seven years while Dish transitions the business and builds out its 5G network.

T-Mobile US Inc. is a Delaware corporation headquartered in Bellevue, Washington. In 2018, T-Mobile posted revenues of more than $43 billion. Deutsche Telekom AG, a German corporation headquartered in Bonn, Germany, is the controlling shareholder of T-Mobile US Inc.

Sprint Corporation is a Delaware corporation headquartered in Overland Park, Kansas. In 2018, its posted revenue was over $32 billion. Sprint is controlled by SoftBank Group Corp., a Japanese corporation headquartered in Tokyo, Japan.

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*This release includes excerpts from the Department of Justice for background information.

Utah Attorney General Reyes: The T-Mobile/Sprint Merger Will Benefit Rural Utah

FOR IMMEDIATE RELEASE
August 9, 2019



UTAH ATTORNEY GENERAL REYES: THE T-MOBILE/SPRINT MERGER WILL BENEFIT RURAL UTAH
AG Reyes underscores the merger’s benefits for competition, rural broadband, and American 5G leadership

SALT LAKE CITY – Utah Attorney General Sean D. Reyes today released the following statement regarding the proposed merger of T-Mobile and Sprint:


“I continue to strongly support the T-Mobile/Sprint merger. Since the companies first announced this combination, they have made a compelling case that it will substantially increase competition in the wireless marketplace, accelerate rural broadband deployment, and boost American 5G leadership—resulting in better quality at lower prices, expanded access to the digital economy for underserved Americans, and greater technological competitiveness with China, among other benefits.
 
“With the commitments the companies have made to the Federal Communications Commission and the Department of Justice, the case for the merger has become even more compelling. Notably, the companies have committed to accelerate New T-Mobile’s 5G build-out plans in rural areas to cover 85% of rural Americans within three years and 90% within six years. Without the merger, rural residents in Utah and across the country could need to wait far longer to get the broadband access they so desperately deserve.
 
“In addition, the merger and accompanying divestiture to DISH would further expand output by ensuring that large amounts of currently unused or underused spectrum are made available to American consumers in the form of high-quality 5G networks.
 
“Finally, this fortifies the domestic telecom market against unnecessary intrusion by other global players looking to acquire weakened US entities. This merger makes America stronger.”

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New Mexico & Utah Analysis of the Sprint/T-Mobile Merger

The T-Mobile/Sprint merger discussion continues to percolate as the Department of Justice and Federal Communications Commission review the issue. Recently, the D.O.J. stated that they believe three carriers are enough to provide a competitive marketplace. Our analysis led to the same conclusion, in this case, we see pro-competitive benefits as the cell phone industry moves forward with next generation 5G technology. In addition, we think the merger will provide better connectivity to the rural areas of our state, which will increase economic opportunity and quality of life.  

Here is an analysis from the attorneys general of Utah and New Mexico.

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Merger will enhance the marketplace and help rural America

By New Mexico Attorney General Hector Balderas and Utah Attorney General Sean Reyes

With a recent increase in media and telecommunications mergers, we have kept a close watch over the proposed combination of T-Mobile and Sprint. Regardless of party affiliation, as state attorneys general, we have a duty to protect citizens in our states. We have whole teams in our office dedicated to protecting consumers from anticompetitive business practices. In that sense, we are guardians of economic as well as legal justice.  We take these matters very seriously.  As Western state Attorneys General, we are particularly focused on improving the public safety, quality of life, and access to technology for our millions of citizens living in rural communities.  

We are not alone in our consideration of this transaction. The United States Department of Justice is reviewing the matter, as is the Federal Communications Commission. Other Attorneys General across the country are analyzing the impact on their states as well. And recently, the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights held a hearing on the merger.

Generally speaking, possible efficiencies, optimization, and growth from a merger may result in improved products or services and the lowering of prices, all to the benefit of customers. On the other hand, a merger may tip marketplace balance too far in the favor of the newly combined companies, giving them monopoly power to raise prices and stifle competition, ultimately harming consumers and driving remaining industry competitors out of the market altogether.

Opponents of the merger are quick to point out that transactions shrinking the number of dominant players from four to three are often disfavored by policies promoting fair competition. While this premise may be true, this particular case has some unique qualities that make this an exception to the rule. Rather than creating a mega-player that will dwarf remaining competitors, a T-Mobile/Sprint merger will take the third and fourth largest domestic players and, combined, create an entity that remains third behind Verizon and AT&T in market share.

Based on our review of the proposed T-Mobile/Sprint transaction, we believe it will benefit consumers in our states—and the country at large—in critical ways. In particular, the combination will create a robust, nationwide 5G network that will greatly improve the lives of underserved Americans in rural areas, stimulate economic growth through investment and job creation, and increase competition in the converging internet market for mobile internet.

For millions of Americans, access to reliable and fast broadband service like 5G is a necessity for everyday tasks such as completing schoolwork, speaking with relatives, paying bills, and applying for jobs. What’s more, when it comes to more advanced applications that are needed most in rural areas that lack resources—telemedicine, remote education, and online shopping for necessary goods not available in remote areas, and accessing government services—these “luxuries” are far outside the technological reach of those rural Americans who are left without adequate broadband connectivity.

Recently, the companies filed their Public Interest Statement with the Federal Communications Commission (FCC) in which they describe in detail, and with economic support, the benefits the merger will bring to all Americans.

Delivering robust broadband service to citizens living in rural communities and small towns across America improving their coverage, quality, speed, in-home service, and customer support is a stated priority for the New T-Mobile. And as attorneys general, we will hold them to that promise. The New T-Mobile has also revealed plans to add 600 or more new stores serving rural and small-town America and building up to 5 call centers, which will result in thousands of new jobs. This is extremely significant, in our minds, and we will do everything within our power to make sure the New T-Mobile lives up to these laudable commitments.

In this day and age, it’s rare for elected officials from our two parties to agree on anything, so it is reassuring when we find common ground on something that has the potential to serve our constituents, protect the marketplace and benefit our nation.  For Utahans, New Mexicans, and all Americans, in rural and urban communities and everywhere in between, we are hopeful that this merger will promote more competition in a converging wireless market and bring benefits to consumers through new technology and economic growth. For all of these reasons, we encourage policymakers and regulators to approve the T-Mobile/Sprint merger.

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Note: New Mexico Attorney General Hector Balderas and Utah Attorney General Sean Reyes presented an expanded version of this joint analysis to the U.S. Senate Judiciary Committee‘s Subcommittee on Antitrust, Competition Policy and Consumer RightsHere’s a PDF of their letter.

Photo by Elvis Bekmanis

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