T-Mobile’s planned takeover of Sprint took a sizable step forward on Friday after a deal negotiated with the U.S. Justice Department behind closed doors was announced.
Under the proposed scheme, the nation’s third and fourth-largest wireless carriers would be forced to sell off wireless spectrum and prepaid businesses (such as Boost Mobile) to Dish Network, the Colorado-based satellite TV provider, effectively making it the country’s fourth-largest wireless carrier, even though it would rely entirely on T-Mobile’s own network.
T-Mobile and Sprint “must make available to Dish at least 20,000 cell sites and hundreds of retail locations,” the Justice Department said in a statement. The company that results from the deal, which would be known as T-Mobile, must also provide Dish with “robust access” to its network for a period of seven years, as Dish attempts to build out its own 5G network.
The $26 billion deal, which enjoys vocal support from the White House, still faces one significant hurdle: a lawsuit brought by 14 state attorneys general, all of whom are Democrats.
While T-Mobile applauded the settlement, promising it would create new jobs, lower prices, and better quality internet, consumer advocates long critical of the deal said it would accomplish precisely the opposite. Many characterized the deal as impossible to carry out given the government’s own history of lax enforcement around megamergers.
“No one who has followed merger enforcement over the past decade can seriously believe this will work,” Joshua Stager, senior counsel at New America’s Open Technology Institute said in a statement sent to Gizmodo. “The government’s track record of enforcing merger conditions is exceptionally poor.”
“The FCC, in particular, lacks credibility given that it has already announced a decision to rubber-stamp the merger without such a remedy,” he added.
Gigi Sohn, a fellow at the Georgetown Law Institute for Technology Law & Policy, accused Justice Department officials of bowing to political pressure from the White House. “The state AGs who sued to block the merger shouldn’t be fooled by this weak attempt to maintain competition in the mobile wireless market,” she said in her statement.
“A new mobile wireless entrant that starts with zero postpaid subscribers and that must rely on its much bigger rival, the new T-Mobile, just to operate is not a competitor. It’s a mobile Frankenstein,” added Sohn.
Jessica Rosenworcel, an FCC commissioner, tweeted that she remains skeptical that settlement will be good for consumers and the economy. She urged the Federal Communications Commission, which previously rubberstamped the merger without the Justice Department’s new conditions in place, to allow the public the opportunity to weigh in and comment.
“Too much here has been done behind closed doors,” she said.