Politics

Texas and Nevada are the latest states to defect from the lawsuit against Sprint/T-Mobile deal

Key Points
  • Texas and Nevada attorneys general announced the states are no longer seeking to block the merger of Sprint and T-Mobile.
  • Texas and Nevada were among a group of states that sued to block the deal, which shrinks the number of mobile carriers from four to three
  • The remaining attorneys general are still expected to bring their case to trial on Dec. 9
T-Mobile CEO John Legere (L) and Sprint CEO Marcelo Claure pose for pictures on the floor of the New York Stock Exchange April 30, 2018.
Brendan McDermid | Reuters

The group of attorneys general looking to block the merger of Sprint and T-Mobile lost two more allies on Monday, as Texas and Nevada announced they have come to a resolution with the mobile companies and will no longer look to block the deal.

Colorado and Mississippi already dropped their challenges. With Texas' and Nevada's departures, 13 states and the District of Columbia are still fighting the deal.

The $26 billion deal announced in 2018 would shrink the number of U.S. mobile carriers from four to three, inviting scrutiny from regulators. Sprint and T-Mobile have argued the combination will allow them to more broadly expand the 5G mobile network, which is expected to power the next generation of technology in the U.S. It would also help the two battle their larger rivals Verizon and AT&T.

While the deal has been approved by the Justice Department and the Federal Communications Commission, it has faced continued pushback from states. New York and California announced earlier this year they were leading a coalition of attorneys general in a suit to block the deal. That suit is part of a broader push from the attorneys general throughout the country to make their mark on antitrust, including investigations of Google and Facebook for possible violations.

A spokesperson for the New York Attorney General's Office told CNBC on Monday that the deal with Texas will not stop the suit from moving forward. The trial is still expected to start Dec. 9.

New York AG Letitia James has been an outspoken critic of deals and companies she views as anti-competitive.

"Today's deal does not resolve the fundamental anti-competitive concerns at the core of this case — that the megamerger of T-Mobile and Sprint will reduce competition in the mobile marketplace," James said. "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 and look forward to the commencement of trial in less than two weeks."

As part of Sprint and T-Mobile's deal with Texas, the two have committed to holding off from raising prices on wireless services in Texas for five years after the deal's completion. They have also committed to building out a 5G network for Texans following the deal's close.

"Our objectives in joining the initial lawsuit were to protect Texans from unnecessary price hikes and to ensure that Texans living in both urban and rural areas will not get stuck with substandard service as the market for wireless telecommunication services evolves to adopt new standards of technology with the power to transform the Texas economy," Texas Attorney General Ken Paxton said in a statement.

"This agreement achieves those objectives," he added. Paxton was the only Republican attorney general in the lawsuit.

As part of its deal with Nevada, Sprint and T-Mobile deal have agreed to bring their 5G network to 83% of the state's rural communities and offer low-price plans.

"Beyond these benefits, the New T-Mobile will make a significant investment to enhance service to our Native American Tribal communities, contribute to programs that enhance opportunities for minorities, women and small businesses. Because of these commitments, I can now support a merger that will preserve Nevada jobs and benefit consumers throughout our State," said Nevada Attorney General Aaron Ford in a statement.