The merger between T-Mobile and Sprint is now complete. After receiving clearance from the DOJ and the FCC, the last significant hurdle it had to clear was the court challenge by a group of states. It was a rare event in which states found themselves pitted against both the merging parties and the federal agencies that had cleared the merger with remedies. A number of issues related to the merger have already been dissected in the public discussion. In this paper, we highlight three significant issues that haven’t received as much attention. These include, the court’s exclusion of Mobile Virtual Network Operators (“MVNOs”) as participants in the relevant market, T-Mobile’s estimation of standalone marginal costs and merger efficiencies, and the somewhat odd remedy that required dismantling of a fully operating network and building of a brand new network to replace that dismantled network.

By Nitin Dua & Keith Waehrer1

 

INTRODUCTION

The recently closed merger between T-Mobile and Sprint went through a long legal process in front of antitrust enforcers across the United States. At one point, the merger was simultaneously being investigated by the Federal Communications Commission (“FCC”), Department of Justice (“DOJ”), California Public Utilities Commission (“CPUC”), and numerous state Attorneys General (“AGs”), including AGs of New York, California, and Texas. Even though the FCC and the DOJ approved the merger, a group of 13 states and

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