DOJ reportedly wants T-Mobile and Sprint to help create new U.S. carrier as part of merger agreement

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Hot on the heels of news that T-Mobile and Sprint are meeting with the Department of Justice regarding their merger, more details on those talks have come out.

DOJ officials want T-Mobile and Sprint to help create a fourth U.S. carrier with its own network if they’re allowed to merge, according to a source speaking to Bloomberg. While the two carriers argue that they’ll be able to create a stronger competitor to AT&T and Verizon if they’re allowed to combine, DOJ antitrust chief Makan Delrahim is reportedly not convinced by that argument and would prefer there to be four U.S. carriers.

Today’s report goes on to say that the DOJ hasn’t yet made a decision on the T-Mobile-Sprint merger and that discussions are ongoing and productive.

T-Mobile and Sprint are now in a bit of a dilemma. They want to make concessions to please the DOJ so that their merger will be approved, but they also don’t want to give up so much that it drastically reduces their benefits of the merger. A new, fourth major U.S. carrier isn’t ideal to T-Mobile because it could try to out-T-Mo T-Mo and take some of its customers, but if T-Mobile doesn’t meet the DOJ’s requirements, the DOJ may sue to block the merger.

It’s unclear whether T-Mo and Sprint will agree to these rumored DOJ requests, if they’ll be able to satisfy the DOJ with other concessions, or if the DOJ will ultimately try to block the deal. For now we’ll have to continue to wait and see how things play out. Stay tuned.

Source: Bloomberg

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  • Android_God

    Thanks OBAMA!!!!!

    • SirStephenH

      Last I checked Trump was in the White House…

      • pretty sure it was a joke…

      • Francisco Peña

        When Obama was in the WH, they blamed everything on Bush. Payback is a Biiiiiiiiitch.

      • UniBroW

        Thanks Obama

    • Ver

      That’s an incorrect assessment .

  • SirStephenH

    So the DOJ wants them to create a far smaller and less competitive fourth carrier? How exactly is that supposed to help anything when the vast majority of cell service is consolidated into three gigantic carriers?

    If the DOJ really wanted to spur competition then it’d block this merger and force AT&T and Verizon to each spin off a third of their assets and customers into a combined fifth carrier resulting in five nearly equally matched nationwide carriers.

    • Eric A

      Where was the DOJ when Verizon and AT&T were being formed?

      • (J²)

        Up someones ass.

      • Augustine

        And gifted spectrum for free and then buying local wireless carriers without having to divest spectrum?

  • James Veley

    I say let the merger happen. But make all 3 big carriers shed the pre-paid brands, I dont know the numbers off the top of my head, but it should be at least 40 million strong.
    Why should tmobile get picked on, when it been big red and att that have been gobbling up company after company, whether it be in the cellular, media, internet, or advertising industry. This makes since for tmobile to become more competitive on all front, especially when it comes to expanding TV service…. though I’m still a fan of dish and tmobile shacking up. True nation wide TV reach if they did.

    • fentonr

      The DOJ can’t just force something like that. They can only sue to stop a merger/break up a company if that specific company violates antitrust law. There are several different laws, but generally speaking, to stop a merger the DOJ bears the burden of proof to show in court that a potential merger would concentrate power so much so that the combined company would be likely to abuse its market position illegally (note, it is legal for smaller companies to do things that would be illegal for larger companies to do. For example, T-Mobile could probably use their non-dominate position in cell phones to subsidize their upcoming TV product because they aren’t a dominant company in either market. The same action would be illegal for AT&T most likely as they are the number 2 wireless carrier and the number 1 pay TV provider). Generally speaking it isn’t easy to prove that a company has/will violate antitrust law and it’s the threat of having to deal with a law suit that prevents mergers.

      What you’re suggesting, good idea or not, would require the DOJ to prove that T-Mobile/Sprint would violate antitrust law and that AT&T has violated antitrust law and that Verizon has violated antitrust law and that spinning off the prepaid brands would resolve the issue…it might be a good idea, but it isn’t practical.

      • James Veley

        Then it would not be practical to request that tmobile spinoff its prepaid brand. Also ATT does subsidize its TV services using cellphone service, they have had plenty of promotions with you can get HBO for free, or DirecTV now discounted. Not letting tmobile compete fairly against them and Verizon given the incredible results they have put forth in the cellular market is a huge loss for consumers.

  • Eric A

    If only there was a company squatting on large amounts of unused spectrum that could be forced to step in…..

    • Boris Govnic

      I hate dish…….. clearwire dish sprint really could’ve been something

  • Ryan Huang

    The US will have to allow a new provider to enter this market should the merger be approved. Foreign or domestic,whether be Japanese,Korean,Canadian,European companies entering this market. The US still has mobile spectrum available. EG the 2600 Mhz spectrum is mostly untouched and its available. For the remaining spectrum I think the most spectrum of any mobile operator right now is AT&T. They are sitting on piles of spectrum yet most of the frequencies are unused. Dish also holds spectrum as well. But currently not imlemented.

    • Augustine

      The largest spectrum squatter is the government. It set aside virtually half of the prime spectrum nationwide to itself and left it unused in most of the country.

  • Berniecrats_for_Trump-2020

    g-d the government is stupid. KAGA, PUMA.

  • (J²)

    What the DOJ is asking is not too unreasonable. Yes, it would likely create a future threat to T-Mobile but it will for a fact drive competition and that’s something T-Mobile is going to have to accept if it wants this merger. That is the main argument FOR this merger.

    T-Mobile would retain all assets. Unfortunately, this would likely mean T-Mobile would be unable to charge for lease out their network to this new company.

    I’m actually for that idea. I would recommend T-Mobile have Metro and Boost Mobile merge.

    • Sharti24

      It cant be a MVNO. It has to be a company that runs their own network

      • (J²)

        Ah, I misread. Yeah then, I don’t see the benefit if they are essentially forcing T-Mobile to pay for Sprint to be picked apart.

        • Francisco Peña

          so its basically, Merge TMo and Sprint, but make a baby-sprint and keep it on life support.

        • ugp5

          When baby sprint gets off life support it will have its own family and daddy amazon will condition it to thrive especially after he marries mama dish to get her dowry?

        • fentonr

          Yeah, and what makes this proposal twice as stupid is that Sprint has been circling the drain for years, if this falls through there won’t be four national carriers in a few years anyway. Sure, maybe Sprint can right the ship enough to remain a regional carrier like US cellular, but for years now they’ve been going back and forth between making a very small amount of money and losing a bunch of money and that just isn’t sustainable. Sure, they’ve started to add lines, unlike in previous years, but giving them away doesn’t help them in the long term.

          Here’s a crazy thing to think about as part of all of this, the DOJ typically has a more limited mandate that the FCC when reviewing mergers (the DOJ can basically only use to block mergers if they think it violates the law while the FCC can consider if it benefits the consumer or not), and yet the FCC supports the merger and the DOJ doesn’t. Delrahim really needs to lose his job.

  • Sharti24

    T-Mobile and Sprint should agree to sell Metro, Virgin Mobile and Boost Mobile to US Cellular. That way US Cellular can be in markets that they currently aren’t located in. Sell them the old sprint towers that tmobile wont be using (overlap towers) and help them expand as a nationwide carrier. Maybe throw in some Sprint PCS spectrum in the deal as well. There’s your 4th national carrier

    • Jason Caprio

      You completely read my mind and I totally agree. This seems to be a very logical solution to this problem. US Cellular seems to only be surviving because of their regional customers, as well as their roaming agreements. Sprint’s MVNO’s can be sold to US Cellular, as well as excess spectrum assets. I would assume this would have to be sold at a very cheap price because I don’t think US Cellular is exactly swimming in money. Furthermore, US Cellular and the combined T-Mobile/Sprint could have extensive reciprocal roaming agreements to help even further.

    • Robert Roll

      i would agree with selling off assets and spectrum(Sprints 850Mhz and 1900Mhz licenses maybe T-Mobiles 700Mhz A block since US Cellular already uses that in there markets) to US Cellular since they are the #5 carrier and already established that would give them a boost.

    • Jay Holm

      You are effing brilliant!!!

    • The One

      This is a great idea, but T-Mobile would want to keep Metro as a low-cost prepaid alternative – the same way AT&T has Cricket and Verizon has (insert name here).

    • gramps28

      Why would US Cellular want to buy it? They have been selling off good sized
      of their own spectrum 5-6 years ago to Sprint and Verizon. I don’t even think they have a footprint in Chicago.

      • Sharti24

        Why? So they can expand and make money like any business likes doing. If they can get the spectrum for free/cheap, you dont think they’d take it?

        • gramps28

          US Cellular will never be a nation wide carrier, tried it once and sold off big chunks of it because they couldn’t make it, and the spectrum won’t come free or cheap like you think.

  • Trevnerdio

    Ahh government…they get that number in their head, and that’s it! No other quantity will do. So by all means, let’s force something that does no one any good but makes this deal a struggle. The government has way too much power.

    • Acdc1a

      They determine who gets spectrum and how much can be purchased. That’s why we have this mess in the first place.

  • Google Sony Android OS

    That’s pretty rich…lets force the smaller two to spin off a 4th when, it would defeat the whole purpose of the merger which is a more equal footing in the game of eventually 3 in order to compete, even in rising cost inevitably among 3, or even 4. Since the gov created the monster to begin with (the big 2) and keeps letting them go unchecked, why penalize tmo for doing the same. Here’s a thought how abt if your magic number is 4, for you to feel the victor here…force all 4 to split/sell equal ratios according to customer subs etc. to create your forth and have 4 equal in the end. Correct your screw up to begin with.

    • M42

      When has any merger ever been good for the consumer? As a Bloomberg article a few years back showed with charts and statistics mergers create poorer customer service, higher prices and less offerings to the consumer.

      • Francisco Peña

        but if those smaller 2 still can’t compete and give an actual competitor to the big 2, then why keep those smaller 2?

        I love TMo, but for their price. That’s it. I got better coverage with Vzw and wish I could go with them but the higher cost keeps me with Tmo. I’d love to be able to get TMo coverage or faster service in the area behind the mall, or around the corner from my house. Keeping Tmo without allowing them to get bigger and use Sprint’s spectrum means I’ll be stuck in my “good” but not “great” coverage.

        • M42

          T-Mobile is doing just fine competing. Spring not so much due to incompetent managers. We need more competition, not less. How about breaking up some of the prior mergers of AT&T and Verizon?

        • Francisco Peña

          Tmo is doing fine but because of price. We all know that nationwide, TMo is lacking. They aren’t going to solve their issues on their current trajectory.

      • Google Sony Android OS

        As I stated before, the big two already unchecked, mergers and acquisitions be it media, spectrum, smaller cellular etc. This is not new, nor is the idea of higher pricing and less offerings…recall when no one did unlimited for a few years…once vzn and the rest stopped…I would bet the reason they brought back more offerings was in fact tmos push/competition disrupting the industry all while gaining customer base for sustained quarterly basis. All while provideing higher levels of customer service, receiving jd power awards as such, and offerings be it sometimes better for new customers, but still grandfathering most plans if needed, or adding perks to some older plans..I disagree, mergers are not all bad in every case.

        • Google Sony Android OS

          NOT, all bad in every case, correction.

  • Jay Holm

    Umm isn’t that what the sale of Boost would do, create another wireless carrier?

    • Eric A

      No, because by that logic every MVNO is a wireless carrier and we’ve got lots of those already.

  • pda96

    So we’ll go from 4 to 3 and then back to 4 again? This is proof that you don’t need a brain to work for the government.

  • Chuan Ren

    Is this a joke or not….

  • Augustine

    The sole purpose of this merger is for T-Mobile to get copious spectrum for 5G and for Softbank to divest itself of Sprint. The DOJ should block this purported merger and, should no buyer appear to snatch Sprint, let it fold and bar the other 3 major carriers from acquiring its assets. It’d be painful for Wall St, but better for consumers. Therefore the merger will go through.

    • riverhorse

      Please don’t EVER run for any government office

  • riverhorse

    Let the government create its own carrier, DHS Cellular. Service free if you agree to complete recording and monitoring and turning over your encryption key.
    Wait, it already does that thru the two most expensive carriers plus the most expensive phone manufacturer …
    Ok, then let’s vote for the Dem Prez candidate offering free Cellular for the masses. At least we won’t pay to get abused.
    Wait, we already pay for abuse in college- 80k a year, includes a dorm plus unlimited sodomizing by the sports teams and frats at night, then by leftist students during the day.
    Ehhh, at least college (and inappropriate abuse) will be free for everyone under the Dems.

    • Google Sony Android OS

      Keyword there to note to oneself is YOU choose to pay for it of your own accord….regardless of representation in public office, and whether the administration was left, right, or in between… Ehhh. yeah. Thanks..for coming.

  • Daniel

    If anything, the DOJ should split up AT&T and Verizon so that this merger doesn’t have to happen for TMo or Sprint to be competitive.