T-Mobile, Sprint Deal Gets Regulators’ Attention at Critical Time

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There appears to be movement at the FCC concerning the proposed T-Mobile merger with Sprint. Representatives from both carriers met Thursday with FCC officials for hours, an indication the deal has reached a critical stage.

Those with direct knowledge of the matter tell Fox the meeting is seen by those inside the companies as positive for a deal that has run into regulatory snags. 

Government officials and citizen groups have been concerned consumer prices would rise and jobs lost if the deal goes through.

But the talks were described as constructive and involved possible proposals by the company to sell off business or make other arrangements to gain regulatory approval, sources told Fox. New Street Research analyst Jonathan Chaplin had been skeptical of the deal’s clearance until word of the Commission meeting began circulating. Chaplin told Fox: “Up through [recently] we were bearish on the merger getting approved; now we are closer to giving the merger a fifty-fifty chance of going through.”

Spokespeople for T-Mobile and Sprint had no immediate comment; the FCC declined comment as well. Company officials for both telecoms have been meeting with FCC and Department of Justice officials in recent months as the timeline for approval draws closer.

The FCC’s shot clock for a decision is in early June. The agency is determining whether the merger would be in the public interest. The DOJ is expected to make its decision around the same timeframe. The DOJ is looking at whether the combined entity, which reduces the number of major carriers from four to three.

Assistant Attorney General for the Antitrust Division Makan Delrahim can approve the deal without the consent of his antitrust staff. He’s said to be open to two arguments, according to sources. First, that approving the alliance would help the U.S. win the race to 5G, and second, the “failing firm defense.” T-Mobile and Sprint officials have argued that without the merger, Sprint can’t survive financially.

A DOJ spokesman had no comment.

May 20, 2019         

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