Texas Drops Out of Multistate Antitrust Cell Company Suit

Texas Attorney General Ken Paxton has reached a settlement with Sprint and T-Mobile over the companies’ merger, making the state the latest to drop out of a coalition of states in an anti-trust suit.

by Taylor Goldenstein, Houston Chronicle / November 26, 2019
Shutterstock/Ryan Conine

(TNS) — Texas Attorney General Ken Paxton has reached a settlement with Sprint and T-Mobile over the wireless companies’ merger, making the state the latest to drop out of a coalition of states fighting to kill the deal in an anti-trust suit.

The move comes just weeks before the issue is set to go to trial Dec. 9 in New York. A group of 14 states and the District of Columbia will argue that the $26.5 billion deal between the two wireless providers will cause prices to go up and competition to go down.

Texas joins Mississippi and Colorado in dropping out of the lawsuit; those two states left in October. Without Texas, no Republican attorneys general remain in the coalition.

In a statement Monday, Paxton said the settlement prevents the merged company from bumping up prices for five years after the merger is complete. It also commits the company to building a 5G network throughout Texas, including in rural areas, for the next six years.

“Our objectives in joining the initial lawsuit were to protect Texans from unnecessary price hikes and to ensure that Texans living in both urban and rural areas will not get stuck with substandard service as the market for wireless telecommunication services evolves to adopt new standards of technology with the power to transform the Texas economy,” Paxton said. “This agreement achieves those objectives.”

The agreement also requires that Texans employed by either of the two companies maintain similar employment under the new company.

T-Mobile had already promised federal regulators there will be a national 5G network and that prices will remain steady for three years.

The U.S. Justice Department and the Federal Communications Commission approved the merger in July after the companies agreed in a separate $5 billion deal to divest themselves of their prepaid mobile phone businesses and spectrum and give them over to satellite-TV provider Dish, setting it up as a smaller wireless provider to compete with Verizon, AT&T and the combined T-Mobile/Sprint company.

T-Mobile CEO John Legere welcomed the “incredible news” in a tweet on Monday: “Texas knows that the #NewTMobile will create jobs and deliver 5G to rural areas of the state and beyond!”

New York Attorney General Letitia James, who is leading the lawsuit along with California, said the settlement in Texas does not alleviate their concerns about the nationwide effect of a merger.

“The megamerger of T-Mobile and Sprint will reduce competition in the mobile marketplace,” James said in a statement. “There is no doubt that this merger remains bad for consumers, bad for workers, and bad for innovation, which is why we remain committed to litigating this matter.”

©2019 the Houston Chronicle. Distributed by Tribune Content Agency, LLC.

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