T-Mobile / Sprint merger faces big problems in GM despite FCC approval

Ministry of Justice antitrust staff have recommended blocking Sprint's attempt to buy T-Mobile, Reuters reported today, citing an anonymous source.

DOJ staff "worried that after the deal, T-Mobile will no longer aggressively seek to lower prices and improve service to attract customers away from market leaders, Verizon and AT & T. T, "wrote Reuters. A final decision should be made in about a month.

To block the merger, the DOJ should file a lawsuit in federal court and convince a judge that the merger violates the antitrust law. DOJ staff recommendations may influence agency decisions about whether to pursue antitrust prosecutions, but they are not automatically followed. The decision of the DOJ will be made by the head of antitrust legislation, Makan Delrahim, appointed by Trump.

Delrahim "is against the merger," Bloomberg reported yesterday. According to Bloomberg sources, the Justice Department "fears that the solutions do not go far enough to dispel fears that the combination of wireless providers No. 3 and No. 4 will harm competition."

T-Mobile has already obtained the merger approval of the chairman of the Federal Communications Commission, Ajit Pai, and the Republican majority of the FCC will almost certainly follow the example of Pai.

According to Pai, the anti-competitive problems of the merger can be addressed through conditions such as forcing Sprint to divest its reseller subsidiary, Boost, and forcing T-Mobile to give Boost wholesale access to its network. Pai also proposed that the merged company increases mobile speeds and deploys 5G in most of the United States – but T-Mobile and Sprint were still considering doing so, whether they merge or not.

Delrahim has spoken out against the use of conditions to resolve the merger issues that should be blocked. Delrahim said in a 2017 speech that he was skeptical "to allow illegal mergers subject to behavioral commitments" because "instead of protecting the competition that could be lost in an illegal merger , a behavioral remedy supplants competition by regulation, decision-making with central planning ".

"Antitrust, it's law enforcement, it's not a regulation," Delrahim said.

Delrahim had previously sued AT & T to try to block the AT & T / Time Warner merger, but he had lost it in court. Delrahim has not yet announced a decision regarding T-Mobile / Sprint; he said at the end of April that he had not made his decision yet.