California Makes Agreement, Backs Down from Resisting T-Mobile/Sprint Merger

California’s attorney general’s office announced they will not appeal the case against the $26.5 billion T-Mobile/Sprint Merger. Judge Victor Marrero in the Southern District of New York ruled in favor of the merger in February. Other states, like New York, have already stated they would not appeal the decision. The case began with 14 attorneys general, but Colorado and Texas dropped the suit before the trial after reaching a deal with T-Mobile and Sprint.

According to a press release, T-Mobile and Sprint reached a settlement with California where they agreed for the next five years to make low-cost plans available in California and offer 100GB of free broadband internet service and a free mobile hotspot device to 10 million low-income households. They also pledged to create 1,00 jobs in California and ensure they would keep the jobs already filled by both companies. T-Mobile will also reimburse up to $15 million to cover litigation costs for the states involved in the trial.

“Our coalition vigorously challenged the T-Mobile/Sprint telecom merger over concerns that it would thwart competition and leave consumers with higher prices,” said California Attorney General Xavier 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.”

The attorneys general previously argued that the merger would reduce competition and make phone bills more expensive for consumers. T-Mobile and Sprint said the deal would lower prices because it would allow them to compete with AT&T and Verizon, in addition to helping them build a better 5G wireless network.

California was one of the states leading the suit against the merger and was the last state to back down. Although states are deciding not to appeal the decision, 24 consumers filed an appeal in their own lawsuit against the merger after their case was denied for the same reasons as the suit from the states. “Only competition can spur the innovation that will advance our technological progress as a nation.  And since it is the consumers who will be affected by this merger and who therefore must be represented, it has been necessary for these consumers to file this action to ensure that their voices may be raised to protect the interests of consumers,” the complaint said.

The incoming CEO of T-Mobile, Mike Sievert, said the deal could close by April 1.