T-Mobile sees path for Sprint takeover

Judge: States’ and companies’ arguments cancel each other

NEW YORK — A federal judge has cleared a major path to T-Mobile’s $26.5 billion takeover of Sprint, as he rejected claims by more than a dozen states that the deal would mean less competition and higher phone bills.

Though the deal still needs a few more approvals, T-Mobile expects to close it as early as April 1.

Once that happens, the number of major U.S. wireless companies would shrink from four to three. T-Mobile says the deal would benefit consumers as it becomes a fiercer competitor to the larger Verizon and AT&T. The deal would also create a new, but smaller competitor as satellite TV company Dish pledges to build a next-generation, 5G cellular network.

A group of state attorneys general tried to block the deal, arguing that having one fewer phone company would cost Americans billions of dollars in higher bills. Consumer Reports said the three remaining companies would have fewer incentives to compete on prices and quality.

Judge Victor Marrero in New York said Tuesday that the companies’ insistence that the deal would cut prices and the states’ insistence that the deal would raise prices “essentially cancel each other out.” Instead, he chose to rely on what wireless executives have done in the past and what they commit to doing in the future in an industry that is changing rapidly.

T-Mobile has pushed in recent years such consumer-friendly changes as restoring unlimited data plans. Marrero said he found that T-Mo

bile executives were credible at trial in promising to continue competing aggressively with AT&T and Verizon.

The judge also agreed with the companies that Sprint was “at best struggling to even tread water” and would not last as a national wireless competitor. He also said that he is persuaded that the U.S. Justice Department’s side deal with Dish, which sets up the satellite TV provider as a new wireless company, would reduce the threat to competition.

Marrero’s decision comes after the Justice

Department already approved the deal. Another judge still needs to approve the Dish settlement, a process that is usually straightforward but has taken longer than expected. A utility board in California also has to approve the deal.

New York Attorney General Letitia James, one of the leading attorneys general in the case, said her office was considering an appeal. She said Tuesday’s ruling “marks a loss for every American who relies on their cell phone for work, to care for a family member, and to communicate with friends.”

Gigi Sohn, a fellow at the Georgetown Law Institute for Technology Law & Policy, said that while consumers

are often promised benefits from mergers, “what they are left with each time are corporate behemoths” that can raise prices and destroy competition.

Sprint shares jumped $3.42, or 71%, to $8.22 in midday trading after the ruling came out. T-Mobile shares rose $8.64, or 10%, to $93.17. Verizon shares fell nearly 3% and AT&T nearly 1%.

T-Mobile launched its bid for Sprint in 2018, after having been rebuffed by Obama-era regulators. T-Mobile CEO John Legere had seen President Donald Trump’s election and his appointed regulators as a good opportunity to try again to combine, according to evidence during the trial.