Texas Attorney General Settles Suit Against T-Mobile/Sprint Merger

On November 25, Texas Attorney General Ken Paxton, settled the suit with T-Mobile Inc. and Sprint Corp. over antitrust concerns. Texas will drop the suit against the $26.5 billion merger after securing a steady price for Texans and 5G coverage for the state. 14 states and Washington D.C. are still in the suit and have alleged the merger will lead to higher prices for consumers and a hindrance to competition. A trial is set to begin on December 9, but without the weight of Texas behind it.

The U.S. Department of Justice and the Federal Communications Commission agreed to the merger between T-Mobile and Sprint, after Sprint agreed to divest its business to Dish Network, and provide Dish with access to 20,000 cell sites and hundreds of retail locations in a $5 billion deal. As a result of the deal, Dish will be the new fourth wireless carrier.

Texas’ settlement will prevent price increases for the next five years and “New” T-Mobile will build a 5G network throughout Texas including most rural areas over the next three to six years. Specific terms of the agreement include that the New T-Mobile will:

  • “Give all Texas customers access to the same or better unlimited talk, text, and data rate plans as those offered by T-Mobile as of the date of the agreement for the next five years;”
  • “Give all Texas customers access to T-Mobile limited data rate plans at a cost far below what is currently offered in the industry;” 
  • “Commit to provide 5G wireless broadband coverage to areas where most Texans live, including most Texans living in rural portions of the state within the next three years and to expand that 5G coverage dramatically within the next six years;”
  • “Offer Texas residents that are currently employed by Sprint and T-Mobile substantially similar employment with the New T-Mobile.” 

New York and California are spearheading the lawsuit against the merger and believe that Texas’ settlement does not resolve a key antitrust concern of the suit. “The megamerger of T-Mobile and Sprint will reduce competition in the mobile marketplace,” Letitia James, New York Attorney General said in a statement. “There is no doubt that this merger remains bad for consumers, bad for workers, and bad for innovation, which is why we remain committed to litigating this matter.”

The Texas Attorney General believes that the merger and settlement would help Texans. “My office is responsible for protecting consumers and this settlement ensures that the New T-Mobile is not in a position to overcharge Texans for wireless service, and at the same time, obligates the New T-Mobile to invest in a high-quality 5G network that will serve the needs of Texas’ growing economy, or face stiff financial penalties,” said Attorney General Paxton.

Texas has joined Colorado and Mississippi in leaving the lawsuit.