Event Driven Takeaways
- A source familiar with the matter told Event Driven that the DOJ has requested information on Sprint and T-Mobile’s wireless businesses from the FCC in anticipation of the companies’ expected deal.
- The same source told Event Driven that the DOJ request was made in early October.
- This is an important indicator that a deal announcement is imminent. The DOJ will be using FCC competition metrics in their antitrust analysis. The most recent FCC Mobile Competition Report presents several economic market definitions that are favorable for the deal including the inclusion of new wireless providers such as Comcast and Charter as competitors.
The US Department of Justice has requested information from the Federal Communications Commission regarding Sprint and T-Mobile’s wireless businesses related to their expected merger announcement, according to a source familiar with the matter.The DOJ made the request in early October, according to the same source.
The DOJ’s use of FCC competition metrics is positive for the deal, because the most recent FCC Mobile Competition report provides several metrics that could offset the 4 to 3 national market consolidation of the deal.
As Event Driven previously reported, both Comcast’s and Charter’s wireless product entries may be considered to offset the negative competitive impacts of the deal.
Political interest in the potential transaction remains high. Several Senate Democrats wrote
a letter to the DOJ and FCC on Oct. 3 urging the agencies to conduct a preliminary investigation of the rumoured deal.
Led by Senator Amy Klobuchar (D-Minn.), the ranking member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, the eight senators wrote that initiating a review now “will allow your agencies to quickly, but fully, review the agreement if it is announced.”
“Competition among four major cell phone carriers has benefited consumers with lower prices, better service, and more innovation,” the senators continued. “We are concerned that consolidation will thwart those goals.”
The combined company would represent 31.4% of the national mobile service provider market before any divestitures. This is less than Verizon’s current 35% and AT&T’s 32.4% market share.
The FCC could not be reached for comment. The DOJ declined to comment for this story.
-- Matt Tracy and Nils Tracy