DOJ, FCC Don’t Seem to Agree on T-Mobile-Sprint Deal

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Despite the T-Mobile-Sprint merger winning the FCC’s impending approval, the deal may not pass muster with the Department of Justice.

The two agencies coordinate their merger reviews and generally come to a unified conclusion. But they do have different standards of review, with the FCC looking at whether the deal is in the public interest and the DOJ assessing the impact on competition.

The companies offered a package of additional concessions to the FCC Monday, including spinning off Sprint’s pre-paid brand, Boost, to win approval of the transaction. The companies had earlier promised not to raises consumer prices for three years post-merger. Agency Chairman Ajit Pai now believes the merger is in the public interest, Inside Towers reported.  

Bloomberg reported the DOJ’s antitrust boss, Makan Delrahim, is leaning against allowing the deal to go through because the remedies don’t go far enough in addressing antitrust concerns that combining the number three and four wireless carriers could harm competition, according to a person familiar with the issue.

The wireless carriers could try to sell additional assets to resolve the department’s concerns that the deal would harm competition. The question is whether there’s anything the companies can propose, like selling airwaves or another business unit, that will sway Delrahim.

The antitrust division may also be worried the companies’ promises to speed deployment of 5G doesn’t outweigh harm to consumers from combining two national carriers, said Amanda Wait, an antitrust lawyer at Norton Rose Fulbright in Washington. “Proving those kinds of consumer benefits is a really uphill battle,” she told Bloomberg. “You can see the DOJ and the FCC going different ways on this because they have different standards of review.”

Former FCC commissioner Rob McDowell, who’s one of T-Mobile’s advisers, told Fox he suspects career DOJ staffers are behind the merger skepticism but that he expects leadership to approve it. He said the FCC has done the “heavy lifting” on that front by extracting a pledge to divest Boost Mobile, Sprint’s prepaid wireless subsidiary.

More than a dozen states attorneys general are also investigating the proposed merger and have raised concerns about harm to consumers. The states have signaled they may sue to block the deal even if the Justice Department clears it.

May 22, 2019

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