Jan 2, 2020

T-Mobile's trial to close Sprint merger heads toward closing arguments

T-Mobile CEO John Legere
T-Mobile CEO John Legere testifying before Congress in March 2019. Photo: Chip Somodevilla/Getty Images

T-Mobile's legal battle to consummate its merger with Sprint heads to closing arguments this month as the companies are trying to convince a federal judge the tie-up won't hurt competition, thanks in part to a side deal with satellite TV company Dish.

Why it matters: The state case, led by the New York and California state attorneys general, is the last remaining obstacle for the deal after the Federal Communications Commission, the Justice Department and shareholders gave it the green light.

What happened: T-Mobile CEO John Legere, Dish co-founder Charlie Ergen and dueling economists testified during the December trial as lawyers for the 14 attorneys general argued the deal will reduce competition in the wireless market and lead to higher prices.

  • The Justice Department cleared the merger after the wireless companies agreed to sell assets to Dish to enable it to enter the market as a new fourth nationwide mobile carrier.
  • T-Mobile pledged not to raise prices immediately following the merger as part of its commitments to the FCC, but critics have argued that promise contains loopholes. Legere acknowledged during cross-examination that the company doesn’t include the cost of devices in its rate plans.
  • Ergen also faced questions from an attorney for the states about text messages from Justice Department antitrust chief Makan Delrahim urging Ergen to reach out to his "Senator friends" to contact FCC Chairman Ajit Pai in June.
  • The FCC and Justice Department teamed up on a Dec. 20 filing arguing that blocking the merger will deprive consumers, especially those in rural parts of the country, of the benefits of the merger.

What's next: Each side will make closing arguments Jan. 15, with the judge ruling sometime after that.

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