New York Abandons Challenge To T-Mobile/Sprint Merger

New York's Attorney General has decided not to appeal a trial judge's decision to approve T-Mobile's $26 billion merger with Sprint.

“We hope to work with all the parties to ensure that consumers get the best pricing and service possible, that networks are built out throughout our state, and that good-paying jobs are created here in New York,” Attorney General Letitia James stated Sunday.

James had led a coalition of 13 attorneys general that challenged the proposed merger of the country's third and fourth largest carriers, arguing the deal would lead to price hikes and worse service for consumers. Other attorneys general, including Xavier Becerra of California, are still weighing their options.

U.S. District Court Judge Victor Marrero in the Southern District of New York rejected the attorneys general arguments last week, ruling that the deal “is not reasonably likely to substantially lessen competition” in the wireless industry.

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Regulators at the U.S. Department of Justice approved the acquisition last year, but only on the condition that T-Mobile and Sprint to divest some assets to satellite provider Dish Network, and allow Dish to use T-Mobile's network for seven years. The Department of Justice argued those conditions would enable Dish to effectively replace Sprint as the country's fourth largest carrier.

The Federal Communications Commission also voted last year to approve the deal, on the theory that it would lead to expanded 5G coverage. FCC Chairman Ajit Pai noted at the time that the companies had promised to create a 5G network that will extend to rural parts of the country -- many of which currently lack high-speed broadband access -- and to avoid price hikes for three years.

But consumer advocacy groups and other critics questioned whether Dish could effectively become a fourth major wireless carrier.

“Sprint is a significantly stronger competitor today than a new fourth competitor could be for the foreseeable future,” Phillip Berenbroick, policy director at Public Knowledge stated last year.

Sen. Ed Markey (D-Mass.), who criticized the merger, noted last year that the Justice Department could have ensured there were four wireless competitors by simply blocking the deal.

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