California AG reaches settlement with T-Mobile

Execs from T-Mobile and Sprint discuss merger
T-Mobile's John Legere and Sprint's Marcelo Claure lobbied hard for much of last year to get their deal over the finish line, and it's almost there. (T-Mobile)

California Attorney General Xavier Becerra announced Wednesday that his office reached a settlement with T-Mobile and his state won’t appeal a district court judge’s decision to allow the T-Mobile/Sprint combination to transpire.

California, along with New York, led a coalition of states that filed suit to block the merger. U.S. District Judge Victor Marrero ruled in favor of the companies in February, and New York Attorney General Letitia James announced soon after that her office would not appeal the decision.

Becerra said the settlement includes terms to protect low-income subscribers, extend access to underserved communities, protect current T-Mobile and Sprint employees and create jobs in California.

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“Our coalition vigorously challenged the T-Mobile/Sprint telecom merger over concerns that it would thwart competition and leave consumers with higher prices,” he said in a statement. “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."

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The deal is also awaiting a judge's review under the Tunney Act, and the California PUC still needs to vote on the matter. Bloomberg reported last week that the CPUC rejected a request from the companies to make a final decision this month and instead will vote at its April 16 meeting, which pushes the likely closure of the deal to May 1.

Here are requirements of the merged company, per the California AG:   

  • Make low-cost plans available in California for at least five 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
  • Reimburse California and other coalition states up to $15 million for the costs of the investigation and litigation challenging the merger

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