Department of Justice reportedly recommends blocking T-Mobile-Sprint merger

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The Federal Communications Commission may be on board with T-Mobile and Sprint’s merger, but a new report says that the deal is now facing opposition from the Department of Justice.

The DOJ’s antitrust division has recommended that the T-Mobile-Sprint merger be blocked, say sources speaking to Reuters. It’s said that the Justice Department’s antitrust staff are concerned that T-Mobile will not work aggressively to cut prices and improve service if the merger is approved.

A final decision from the DOJ is expected in about a month.

Multiple FCC leaders, including Chairman Ajit Pai, came out in support of the T-Mobile-Sprint merger this week after T-Mo made commitments tied to the deal’s completion. Those include 5G and in-home broadband rollouts, a three-year price guarantee, and the sale of Boost Mobile.

We’ve heard rumblings recently that the Justice Department was leaning towards blocking T-Mobile and Sprint’s deal, but today’s report is the strongest indicator yet that the DOJ will indeed file a lawsuit to block the merger from happening. That’s a big deal for T-Mobile and Sprint’s merger which may have looked like it was trending toward happening with the news of the FCC’s support earlier this week, but is now in doubt.

Source: Reuters

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  • Fabian Cortez

    It’s said that the Justice Department’s antitrust staff are concerned that T-Mobile will not work aggressively to cut prices and improve service if the merger is approved.

    Among other issues.

    Job losses anyone? Reducing consumer choice from four to three?

    • (J²)

      The FCC has already determined that this in the public’s interest.

      The DOJ can only file to block the merger for antitrust reasons which can be overturned in court.

      It’s disturbing that we allow huge companies with bad reputations continue to acquire other major competitors but somehow, the little guys teaming up is a huge issue.

      It’s many M&A’s too late in this industry. This consolidation needs to happen to re-balance the power between the 3 or else, we will all suffer later when Sprint slides into bankruptcy or is purchased by some random corporation. T-Mobile will continue to miss the mark on being a legit competitor to Verizon and AT&T which will probably knock T-Mobile and Sprint down a few pegs with the 5G rollout.

      • DHar Harr

        ^ so much this. Enough with the muh job losses. We need legitimate competition that can actually compete with the duopoly. This will bring jobs through competitive growth!

      • Sean sorlie

        Not only that, but if Sprint is allowed to die, AT&T/Verizon will be able to gobble up most of the carcass while T-Mo might get a small piece, putting AT&T/Verizon even further ahead.

      • disqus_7XunpanFgK

        After the recent court losses, the DOJ is looking for a win. T-Mobile is unfortunately the scapegoat for the knuckleheads in the DOJ anti-trust office.

      • Robert Roll

        sounds like the Unions that are trying to stop the merger represent Verizon and AT&T workers maybe the lose of jobs will because Verizon and AT&T have to cut cost to compete with a merged T-Mobile Sprint by reducing there work force. but who knows

    • Francisco Peña

      Your argument of reducing consumer choice is incorrect. There are plenty of MVNOs and small regional carriers that folks can use.

      Right now, ATT and VZW are the biggest. They control the market. TMo and Sprint are the stepkids.. not much to worry about, but every now and then causes enough problems to cause the other 2 to smack them down.

      You honestly think that without another big company to come and rattle them, Att/Vzw will offer better deals on their own? If TMo keeps their desire to stick it to the other two and give better deals, folks will leave those 2, and theyw ill have to adjust because there is another one that can compete.

      Using Sprint and Tmo’s combined spectrum will allow them to expand coverage quicker than they will if its stuck at 4 companies.

      Look at Ford. plenty of car manufacturers, yet they are cutting 7000 jobs, and analysts say they need another 23K. So just because there are plenty of options, doesn’t mean jobs will always be safe.

      • SirStephenH

        “There are plenty of MVNOs and small regional carriers that folks can use.”

        And who provides those carriers with service? The big 4 do.

        And who sets the pricing for the service those carriers buy? The big 4 do.

    • disqus_7XunpanFgK

      Tell that to the 1000+ jobs being set up in Kingsburg, CA call center “should” the merger be approved. Or the 1000+ jobs that will be lost in Overland Park, KS. Or the 3000 jobs that will be lost in the other 3 call centers spread throughout the US.
      Tell that to the tower climber and maintainers that stand to lose out on new jobs to build out the new T-Mobile network with Sprint towers.

      You talk about possible job losses. I talk about guaranteed job losses IF THE DEAL FAILS!

      • Acdc1a

        Let’s assume the worst case scenario. Let’s assume that all 3 carriers pull a “Canada” and raise prices to absurd levels. The first thing that happens is we stop giving our 7 year olds phones with unlimited data. That causes profits to drop and an opening for another company with substantial spectrum (see dish) to deploy their own network and compete on cost forcing the other 3 to lower their prices. That carrier will also have tens of thousands of jobs to fill.

  • Eric A

    The same DOJ who won’t go after spectrum squatters that provide NO service. Yes, that DOJ.

  • Michael Elkin

    The irony is that the only real Anti-trust concerns should be with with Verizon and ATT. They are the ones buying and hogging spectrum to make sure Tmobile and others cannot grow. Previously mentioned in previous Tmobile suits and complaints. This merger would give Tmobile more of the need spectrum to compete. Hopefully they won’t become greedy like the big boys.

  • tbonenga

    Thank goodness! Americans already pay a premium compared to other countries. TMO and Sprint going head to head has already forced Verizon and At&t to drop prices and bring unlimited data back. If this merger gets approved the American consumer is screwed

    • Francisco Peña

      TMO and Sprint will never be a big dog in the yard. Sprint is holding onto life support as we speak. Tmo and Sprint won’t have enough money to increase market share and spectrum when available to make that big of a dent.

      Normally, I’d be against certain mergers, but creating a 3rd big dog, using the combined spectrum assets of both, would create a better playing field. If TMo can continue to offer better deals, and expand tehir network with the Sprint spectrum quickly, including 5G, then there will be an incentive for folks to finally switch. And if they do start taking more subs from ATT/VZW, those two will have to adjust. They won’t be able to claim more coverage for much longer.

      Don’t do the merger, and there is no incentive for them to lower prices, give better rates, etc.

      Right now, those big 2 concede just enough deals to appease some folks, but they don’t need to give drastic deals all the time.

      • tbonenga

        You’re very naive if you believe that. Do some research and you’ll see this merger is a disaster for the American consumer. FYI… Why do you think Verizon and At&t aren’t opposing this merger? TMO is the only one gaining real customers in the last few quarters. Sprint is the thorn in Tmo’s side. If this merger goes through TMO won’t need to as aggressive on pricing. If you research you’ll find all the statistics you need to see this is bad for the consumer

        • riverhorse

          Children, children be nice. Yesterday Francisco pointed out my ignorance; today I upvoted him. Today you point out his naivette.
          Does this mean I’m allowed to point out others’ numbnutness?

        • Francisco Peña

          Sprint isn’t a thorn. Sprint had a net loss of $1.9B in 2018 and the yr before had a net income of $7.4B… not doing so hot there. And the report from the 3/31/19 report shows they had 710 net additions for postpaid lines, but looking at their table, they had losses which gave a net addition of just 77,000. Not doing so hot there.

          Sprint offers nothing other than spectrum and a subscriber base to boost Tmo. If VZW/ATT are then 2/3rd, then they will end up offering deals. As of now, they don’t need to.

          If Tmo is 2/3rd, they will still offer deals. I bet the only research you have are from the same liberal groups saying the sky is falling and that every lower income family or family of color will be effected by the increased costs from this merger.

    • squiggleslash

      Regardless of whether the merger goes through or not, we’ll end up with three operators because Sprint isn’t viable as a company. If the FCC has its way, they’ll be mostly equal. If the DoJ has their way, it’ll be two sharks and a minnow. So, outside of AT&T and Verizon shareholders, there’s no “Thank goodness” about it.

      • tfranzman

        Isn’t there already a merger agreement between Tmobile/Sprint?

        • Francisco Peña

          yes, but it needs to be approved by the governmental agencies in charge of this area.

    • DHar Harr

      We’re already screwed because of the duopoly. The merger will shake it up and bring legitimate competition.

    • tfranzman

      This is simply assertion on your part. Is it because Sprint is going head to head with Tmobile? or with Verizon and/or ATT? What are the real dynamics here? How do we know that its not just competition between the big 2?

    • disqus_7XunpanFgK

      Sprint has NOT been going head to head with T-Mobile for the last 2 years. T-Mobile has been going head to head with Verizon and ATT.
      Sprint has been bleeding customers to all 3 over that time frame. They couldn’t go head to head with anyone.

  • kev2684

    But they let Disney gobble Fox? hmmm.

    • Derek

      Theres a difference between a utility and a media company. No one NEEDS a media company. Phone service on the other hand….

      • kev2684

        Isn’t that an incentive for the merger though? Without each other they can’t compete with Verizon and AT&T. Sprint will eventually die out and their customers will be divided into three. Sure, T-Mobile will get a huge chunk of it but they will remain a distant third. Duopoly will continue until T-Mobile can no longer compete.

      • Acdc1a

        Perhaps then you’d like to explain 2 or fewer broadband operators in 99 of the top 100 markets…

        • Francisco Peña

          That is due to State’s utilities and regulators.

          Luckily, we have 2 cable/internet providers in my area and they are consistently trying to offer deals. Only bad thing is playing the switch game every 2 yrs to get a better deal.

        • Jim Mill

          Exactly I wonder who At&t Verizon are paying off they don’t want it. Tmobile will begin to take them apart

      • disqus_7XunpanFgK

        No one NEEDS cell service either.

  • riverhorse

    Keep in mind this debatable unconfirmed not officially quoted source leak is supposedly from staffers at antitrust division… low level-ish.

    No unattributed leak of any division head or overall DOJ higher up, much less IG Barr assistant Barr Trump or family or Pence or Cabinet or WH advisor…or even any assistant or staff member to any of them.

    Irrespective of your rooting interest in the final decision, this leak is close to meaningless.

    As an aside, Legere could put out a reminder of a net jobs gain post merger.

    • Reagan1

      Good to be skeptical of anything Reuter’s puts out.

    • Gvelocity

      “As an aside, Legere could put out a reminder of a net jobs gain post merger.”

      That’s because they are creating jobs by insourcing call centers while letting people in other department go.

      Three years from now, when integration is done, there won’t be net job gains. Think about how many people will be let go because you don’t need 2x HR, 2x Finance, 2x Corporate, 2x IT, etc… Also, any big metropolitan areas that have competing stores will have to close one or the other as it’s not sustainable to have 2 “new” T-Mobile stores next to one another. Merger synergies are achieved by reducing workforce… simple as that.

      • riverhorse

        In most mergers i would agree with you. In this case I’m backing on unfulfilled potential of filling in missing coverage (and thus more retail customers and b2b sales), TV, home internet… May not be the same people in the end even with retraining offered.
        I’m thinking huge behemoth leaving Verizon in its dust. If merger approved, this will be my main portfolio option.

        • Gvelocity

          b2b sales??? TMO has proven to be not so successful in that dept.
          filling missing coverage can only go so far… as rural areas dont provide your ROI. It also doesn‘t change the fact that you have stores within a mile radius from one another… which you will have to close some. Tvision is proven to be crap as tmo price the service as “premium” with premium price yet you still need internet!

          Lastly, broadband. What people fail to realize is that tmo still has to pay the hardline providers (att, comcast, verizon, etc) that are connected to their towers a fee based on the bandwidth utilized… which will make for a costly endeavor.

        • riverhorse

          So then the satellite providers will take over?
          TeslaAmazonGoogle?

        • Gvelocity

          If you are talking about Low Orbiting satellites, that’s still 5+ years away and its application in real-life or to market is unproven (what happens to your speed and latency when you add thousands/millions of users). Add a few more years to work out the kinks, who know when that will actually happen.

  • Nearmsp

    Less number of companies, means less choice for American consumers and higher prices. It is highly naive to expect T-mobile to invest billions in buying out Mr. Son’s interest in Sprint to then continue the heavy discounting. As it is Americans pay far higher prices than Asians and Europeans for both cable internet and wireless service. Time to stop T-mobile buying out Sprint.

    • disqus_7XunpanFgK

      Remember this when Sprint goes bankrupt (should the merger fail) and we are down to 3 companies anyway. Then you will have 2 companies in much stronger positions to buy the auctioned remains of Sprint. The only naivety I see is in your post.

      • Jason Caprio

        T-Mobile was on the verge of going bankrupt before John Legere took over when the AT&T merger failed. If this deal with Sprint fails, they may get a nice breakup-fee and possibly change CEOs, then become the next un-carrier lol

        Sprint would have no choice but to take desperate measures if the merger fails. Don’t assume they would go bankrupt. T-Mobile recovered from near total failure.

        • disqus_7XunpanFgK

          Nope. There is no break-up fee like T-Mobile got with ATT. The ATT-T-Mobile deal had a caveat in the contract, that if the deal fell through, T-Mobile would be compensated.
          This deal has no such caveat. If the deal fails, Sprint is screwed.

        • SirStephenH

          Sprint gets a roaming deal in the case of a failed merger, that’s it.

      • Nearmsp

        In a capitalistic market economy it is not the role of government to play God and reduce competition based on fantasy fears. That said there is an ocean between going bankrupt and being bought out after a hair cut for current shareholders. The main Shareholder being Mr. Son, CEO of soft bank who has majority ownership of Sprint. At the right place a buyer wanting to get into the US will emerge. If not the assets will be sold off to existing 3 shareholders. Recall when Chrysler was close to bankruptcy the Italian owned Fiat bought them out.

    • riverhorse

      All naivette aside, no merger means 5G woud be a practical duopoly, with those two not incentivized to lower prices, because the potential mergees don’t individually have the bandwidth and coverage to compete. It’s like denying a Linux & Symbian merger because it would mean less competitors to Windows.
      In this particular case no merger would likely force your higher price complaint. The top two because that is just what they have always done, leaving the bottom two to fold while having to raise prices during their death throes.
      As far as the funds spent upgrading, that is absorbed by higher share prices, more customers–especially in the no/poor coverage areas, and upselling faster, higher caps, tv, home internet, b2b, etc.
      Whether one’s spouse or cellular carrier, it is illogical and hurtful to deny a wished for upgrade to a so far loyal, non money-grubbing partner on the grounds you don’t trust them to not cheat you in the future. That’s chaos, and self-harm, That’s turning a friend into an enemy WHILE empowering the enemies of you and your partner.

      Anyhow, the merger for present customer is win-win with zero risk- grandfathered forever @ present plan with never a change of terms / price except fo better coverage… or pay more for extra.

      Some things are cheaper in Europe because they’re heavily regulated & subsidized from the proceeds of 60-90% income tax, so that’s easy to do. But & why almost everytime they allow some price increase or cheaper foreign product import deadly riots ensue. So yes, EU better not permit cellular / internet price increases if they value peace. LOL
      But some things are way more expensive there, not just petrol. Just like medical tourism to America, there’s retail tourism. London Fog and other great brands are much cheaper in America, paying for the travel cost and then some.
      France used to be a world leader in drug development. Then they mandated affordable pricing, R&D dried up, nothing new gets invented now.

  • frankinnoho

    Thank god! The big disruption coming down the road for all the telecoms is not 5G, it’s satellite internet. Saddling themselves with Sprint’ baggage will not help T-Mobile, at all!

    Sprint’s fantasy’s (WiMAX, Spark, 5G) have caused the company nothing but problems and need to die. The company should focus on its strengths: Low cost service to entry level, urban, budget customers. They already have the most used budget mvno’s. If they get real, they could be the Walmart of telecoms. They will never sell these people video services, or pretty much any add-ones, so why try. They should sell the 2.5Ghz spectrum they will never use, spin off the fiber business to pay off debt, transition CDMA to LTE or even HSDPA so they can make better roaming deals, and get moving on the future.

    T-Mobile has been ignoring their own customers during all this, and in places (like where I live) the network has become extremely congested and nothing is being done about because… the merger. The money they were going to use to bailout Sprint’s fantasy’s can be used to buy their spectrum and upgrade the network. If they aren’t ready when satellite internet comes online, they will suffer greatly.

    • turtle6988

      Obviously you don’t understand how this merger would go. Loom what T-Mobile did when they merged with MetroPCS. I was apart of that transition in the Detroit Market. T-Mobile looked at both Networks and found holes that would be created when shutting down Metros network and built at existing Metro tower locations. They work over a course 0f under 2 years to transition customers off of Metros CDMA network and onto T-Mobiles GSM/LTe network. Both Metro and T-Mobile Customers were better for it. T-Mobile will do the Same thing with Sprints network build at Sprint Tower location where current T-Mobile coverage holes exist and where holes would be created in Sprint customers current coverage area. Both customer bases will be better off in the long run. As for jobs T-Mobile made other opportunities available for both T-Mobile employees and Metro Employees to avoid any job losses. If I would of got the transfer I wanted at the time I would of received a very nice bonus along with all moving charges covered. I left T-Mobile on my own about 2 years ago. Not by choice but by my own stupidity. If I could still be employed there I would be. They take very good care of there employees especially there Engineering employees.

      • none

        Sprint’s LTE network(on band 25, 26 and 41) would be merged with T-Mobiles LTE network as-is(on band 2, 4, 5, 12, 66 and 71). Then Sprint’s CDMA network would be refarmed to LTE(and it would mostly cover LTE band 5/26).

        Thanks to some phones coming out with LTE 7CA, in areas with both Sprint and T-Mobile coverage, phones would be able to use band 2, 4, 12, 25, 26, 41, and 66 at the same time, and hypothetically, get gigabit speeds over LTE.

        So, T-Mobile’s LTE network would get far faster(because Sprint’s LTE network exists in places where T-Mobile usually already has LTE service. So tower density increases, along with backhaul, and spectrum in these areas). And since Sprint’s 3G CDMA network is already more widespread than T-Mobile’s LTE, all of that CDMA spectrum can be refarmed to LTE, and this gives T-Mobile a widespread LTE network, capable of serving millions more customers than either Sprint or T-Mobile can serve on their own.

        Or better yet, combine the two networks, refarm all of the band 41 LTE to 5G NR on band 41, and now you have a 5G network that serves every metro area in the US. Then you do the same thing to band 66 and band 71.

        • turtle6988

          I don’t think I could of said it better

  • NardVa

    The same DOJ that had no issues with AT&T and DirecTV merging and raising everybody’s price is the same DOJ that has the nerve to say they are worried about T-mobile increasing prices. When has the DOJ did anything for consumers to keep cell phone bills low? AT&T and Verizon have been raping their customers for the last several years. It sounds like AT&T and Verizon have the DOJ in their pocket.

    • SirStephenH

      The AT&T/DirecTV merger didn’t reduce cellular competition…

  • SlopeTangentAnswer

    Less companies, less choice and a ton of job loss. I bet Legere regrets trying to ingratiate himself with the administration. That will likely come back to haunt him.

    • Steven

      How would it?

  • Philip

    Yet they do not block Delta NWA merge,etc etc! Why?