Dish could be winner in antitrust boss’ plan

Makan Delrahim, the U.S. Justice Department’s antitrust chief, is trying to shape a deal combining TMobile US and Sprint that he can pitch as a win for consumers. Here’s how he may do it.

If the $26.5 billion deal is approved, it’s likely to include conditions that give satellite TV provider Dish Network Corp., which has its headquarters in Englewood, enough airwaves, prepaid customers and network access to emerge as a new national wireless competitor.

That would allow T-Mobile and financially struggling Sprint to merge and create a stronger No. 3 rival to AT&T and Verizon Communications. Dish’s role would satisfy the government’s long-standing demand that there be four national mobile-service companies remaining.

“The right deal could be a genuine win for consumers, and if Delrahim structures it right, the facts and history will stand by him,” said Jonathan Chaplin, an analyst with New Street Research.

The Justice Department is nearing a final decision. While the broad outline of an accord has been established, key issues are still being debated — including possible limits on Dish’s ambitions as a wireless carrier. The company owns billions of dollars in unused airwaves that could be tapped to create an even more formidable competitor if it’s free to obtain sufficient outside investment to build its own network, according to people familiar with the matter.

Under that broad outline, Sprint’s airwaves would land in more financially stable hands. The No. 4 U.S. carrier has the most mobile-phone spectrum in the U.S. but has limited ability to build a network given its years of losses and financial constraints. Combining with No. 3 T-Mobile would solve those problems.

Even if Delrahim gives his blessing, he’ll still have to convince opponents that consumers won’t see higher prices and fewer choices. One point he’ll likely to highlight is that the deal provides a path to putting Dish’s trove of airwaves to work.

The department declined to comment.

Skeptics point out that the track record for competitors created by divestitures has been dismal. French communications firm Iliad became Italy’s fourth carrier last year after buying assets divested by two larger rivals that merged. Iliad had an initial surge in subscriber growth, followed by a slowdown across the sector.

“The premise that this deal will be good for everyone may be a little overly optimistic,” said Phil Berenbroick of Public Knowledge, a consumer advocacy group in Washington. “It’s obvious how harmful they think the deal is if they have to create a remedy as extravagant as this.”