After a failed attempt to stop the T-Mobile/Sprint merger, the California Attorney General has come to terms with the company and will not pursue an appeal.
Despite the merger receiving approval from both the FCC and the DOJ, California and New York led a coalition of states attempting to block the merger. As the process carried on, several states negotiated with the two carriers and won enough concessions and guarantees to drop out of the lawsuit. The suit continued on, however, and stood poised to set a precedent for the role states have in contesting and stopping a decision federal agencies supported.
Ultimately, T-Mobile and Sprint won, but California was still able to get some additional concessions in the aftermath. In the press release, Attorney General Xavier Becerra listed the concessions T-Mobile agreed to, including:
- Make low-cost plans available in California for at least 5 years, including a plan offering 2 GB of high-speed data at $15 per month and 5 GB of high speed data at $25 per month;
- Extend for at least an additional two years the rate plans offered by T-Mobile pursuant to its earlier FCC commitment, ensuring Californians can retain T-Mobile plans held in February 2019 for a total of five years;
- Offer 100 GB of no-cost broadband internet service per year for five years and a free mobile Wi-Fi hotspot device to 10 million qualifying low-income households not currently connected to broadband nationwide, as well as the option to purchase select Wi-Fi enabled tablets at the company’s cost for each qualifying household;
- Protect California jobs by offering all California T-Mobile and Sprint retail employees in good standing an offer of substantially similar employment. T-Mobile also commits that three years after the closing date, the total number of new T-Mobile employees will be equal to or greater than the total number of employees of the unmerged Sprint and T-Mobile companies;
- Create approximately 1,000 new jobs in California with a customer service center in Kingsburg;
- Increase diversity by increasing the participation rate in its employee Diversity and Inclusion program to 60 percent participation within three years; and
- Reimburse California and other coalition states up to $15 million for the costs of the investigation and litigation challenging the merger.
“Our coalition vigorously challenged the T-Mobile/Sprint telecom merger over concerns that it would thwart competition and leave consumers with higher prices,” said Attorney General Becerra. “We took our case to court to ensure that, no matter its outcome, we’d protect innovation and fair prices. Though the district court approved the merger, its decision also made clear to companies that local markets matter in assessing the competitive impact of a merger and that no one should underestimate the role of state enforcers. Most importantly, today’s settlement locks in new jobs and protections for vulnerable consumers, and it extends access to telecom services for our most underserved and rural communities.”
With an appeal by California off the table, the two companies should be moving full speed ahead to close the deal.