FCC Chairman Tom Wheeler expressed skepticism about a deal between Sprint (NYSE:S) and T-Mobile US (NYSE:TMUS) in a meeting with Sprint CEO Dan Hesse and SoftBank CEO and Sprint Chairman Masayoshi Son, according to a Reuters report. Wheeler's pushback against a merger between the Nos. 3 and 4 carriers follows a clear signal from the Department of Justice that such a deal would face intense scrutiny.
The Reuters report, citing an unnamed FCC official briefed on the matter but who was not present at the meeting, said Wheeler told Son and Hesse he was highly skeptical of the potential deal. Wheeler said he would keep an open mind about the deal though, the report said.
Sprint and the FCC declined to comment, according to Reuters.
Last week William Baer, assistant attorney general for the Justice Department's antitrust division, said further consolidation among the top wireless carriers would face intense analysis. Wheeler himself has also publicly said that he favors keeping four national wireless carriers.
Sprint has been trying to convince U.S. regulators that the prospect of consolidation should not be denied without a fair review, and that more consolidation is needed to better challenge Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T).
An unnamed source close to SoftBank told Reuters: "I'm not unduly surprised by the FCC chairman's skepticism. I feel it's a rather typical reaction."
SoftBank, which owns Sprint, is in talks with Deutsche Telekom, which owns T-Mobile, on a deal, according to multiple reports. However, there are many issues that still need be resolved, including DT's stake in the company and who the senior management of a combined Sprint and T-Mobile would be. Additionally, the regulatory opposition raises the importance of a breakup fee that would be paid if a deal was made but later fell through. Sprint can't afford to pay a sizable fee, which would likely total in the billions of dollars, an unnamed person familiar with the matter recently told the Wall Street Journal.
- see this Reuters article
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