T-Mobile/Sprint merger might be jeopardized by Dish's unreliability
Department of Justice and Federal Communications Commission, the merger poses at least two big concerns for a group of 13 state AGs and the Attorney General for the District of Columbia. While promises have been made and mechanisms have been put in place to specifically address these points of contentions, the merger's legal challengers are reportedly planning to cast doubt on the dependability of a third major wireless industry player connected to the pending transaction.Cleared by both the
Industry competition is essential
We're of course talking about Dish, which should take Sprint's spot as the nation's fourth-largest mobile network operator after acquiring $5 billion worth of spectrum and prepaid businesses. This second deal, which is naturally contingent on the finalization of the first transaction, may have been enough to put the DOJ and FCC at ease in terms of competitive concerns, but the aforementioned band of AGs led by New York's Letitia James and California's Xavier Becerra are not buying Dish Network's solemn and ambitious vows.
That's because Dish Chairman Charlie Ergen apparently has a bit of a reputation for "never playing by the rules", repeatedly breaking government regulations over the years in ways that would ultimately benefit his businesses, including Dish predecessor EchoStar. Furthermore, while Dish is not technically in violation of any official promises or rules after obtaining extension after extension from the FCC, the company continues to sit on a whole bunch of government-issued spectrum that could have enabled the launch of a pretty far-reaching wireless network by now.
Said spectrum could theoretically be combined with the assets Dish is set to purchase from Sprint to indeed create a powerful fourth carrier and maintain today's healthy wireless competition, but that requires a lot of investment and "New T-Mobile" opposers fear Charlie Ergen might instead continue to hoard spectrum "in order to flip it down the road" at a profit. Naturally, Dish faces massive penalties if the two deals close and the company does not deliver on its promises by 2023, but unnamed sources quoted by the New York Post believe said sanctions could be "hard to enforce."
T-Mobile is trying everything to get this done
It sounds like the New York and California-coordinated effort to block the $26.5 billion merger might have a stronger chance to succeed than some of you anticipated, but surprise, surprise, T-Mobile and Sprint were reportedly in talks with Letitia James on Friday attempting a last-minute settlement. That clearly didn't happen... yet, but if the rumor was true, this could signal a little light at the end of the tunnel for the "New T-Mobile."
We don't know exactly what was discussed at this confidential meeting (if such a meeting ever took place), but until recently, New York's Attorney General didn't seem interested in talking at all. We'll keep an eye on the legal proceedings as they begin later today, and in other news, we're also curious to see if T-Mobile will be able to close the deal at a lower price than the one settled on way back in April 2018. Meanwhile, CEO John Legere is still scheduled to leave office in just a few months, which is yet another thing that could have an impact... of sorts on the merger if it's not wrapped up by then.