Makan Delrahim, Ajit Pai met Friday to discuss T-Mobile-Sprint deal as DOJ decision looms
FOX Business’ Charlie Gasparino reports that DOJ’s Makan Delrahim and Federal Communications Commission Chairman Ajit Pai had a conversation about the potential T-Mobile and Sprint deal.
Department of Justice antitrust chief Makan Delrahim and Federal Communications Commission Chairman Ajit Pai met Friday to discuss the proposed merger of T-Mobile US, Inc., and Sprint Corp., as final negotiations for the $26 billion deal appear to be drawing to a close, the FOX Business Network has learned.
People with direct knowledge of the government’s activities say a final government decision on the merger could come as early as this week.
The merger of the two smallest major wireless carriers is one of the most closely watched transactions on Wall Street and in Washington, D.C.; company officials have tried and failed in the past to get the deal through the political and regulatory apparatus of the FCC and the DOJ’s antitrust division during the Obama administration.
But in April of last year, the companies gave the deal another shot, hoping that the business-friendly Trump administration would do what the Obama administration wouldn’t, and greenlight the merger. The companies received one key approval in May when Pai and the FCC’s Republican majority said they supported the merger after both companies agreed on several concessions.
Pai and the GOP commissioners have publicly voiced strong support for the deal, saying the antitrust concerns were overblown and the combined company will help foster competition because it will be better prepared to compete against wireless leaders AT&T and Verizon. The FCC commissioners join both President Trump and economic officials in the White House, who believe a stronger combined company will help the U.S. compete against foreign outfits in the area of superfast fifth generation wireless technology, thus creating millions of jobs and adding to economic growth.
The deal, however, still faces stiff resistance from the DOJ staff attorneys who argue the combination will reduce competition and possibly lead to higher wireless prices.
Stuck in the middle is DOJ antitrust chief Delrahim, a Trump appointee and free market conservative who can ignore the concerns of the staff and approve the deal. Not only is he worried about a backlash from his staff, but also concerning Delrahim is that the merger could face successful lawsuits from state attorneys general.
As a result, he is pushing the companies for further concessions. Delrahim and his staff were said to have met with T-Mobile and Sprint executives on Monday in Washington as well their respective chief executives, John Legere and Marcelo Claure, according to people with direct knowledge of the matter.
Much of Friday’s conversation between Pai and Delrahim focused on how to keep the telecom space competitive and how the agencies can ensure T-Mobile and Sprint follow through on all promised divestitures and price commitments, people with knowledge of the matter say. The companies are in discussions with the DOJ to divest some wireless spectrum and some other businesses. In order to receive the DOJ nod, the companies may need to divest other prepaid businesses in addition to Boost.
The Delrahim-Pai lunch meeting was held at Washington, D.C., restaurant Central Michel Richard. People with knowledge of the meeting say it’s unclear if Delrahim was persuaded by Pai’s arguments in support of the merger.
But analysts say the fact that the two met at this critical time shows that the timetable for DOJ approval has been expedited.
“I believe the decision will come in less than 10 days,” said long-time telecom entrepreneur Peter Adderton, the founder of prepaid wireless company Boost, which is now part of Sprint and will be sold to meet the FCC concessions if the merger moves forward.
Adderton, himself, met with DOJ antitrust officials on Friday recommending to them that the agency’s approval should be conditioned on knowing the exact timetable of the divestures and who the acquirers will be to guarantee compliance.
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A DOJ antitrust spokesman had no comment; an FCC spokeswoman had no comment. Spokesmen for T-Mobile and Sprint had no comment.
For now, Delrahim is said to be undecided as company officials continue to meet with the Antitrust Division to push the deal through. The DOJ can oppose the deal by announcing a lawsuit to block the merger in federal court.