Justice to recommend blocking T-Mobile-Sprint merger: report

The Justice Department’s career staff is recommending that it files a lawsuit to block the $26 billion T-Mobile-Sprint merger, according to a Reuters report.

The final decision of whether to intervene stop the combination of the two telecom giants lies with Assistant Attorney General Makan Delrahim, the head of the Antitrust Division.

{mosads}Two unnamed sources told Reuters they expect a decision to be made within a month.

The news comes two days after the Republican-controlled Federal Communications Commission (FCC) said it would approve the merger after the two companies promised to expand coverage in rural areas, not raise prices for three years and build out a competitive 5G network.

It has been reported for months that the Justice Department, which also needs to sign off on the deal, has been concerned about combining two of the nation’s four national telecom providers and its potential to lead to higher prices and less competition.

A Justice Department spokesman declined to comment.

FCC Chairman Ajit Pai said earlier this week that the companies’ commitments to expand rural connectivity and to build out a large next-generation 5G wireless network satisfied any concerns he might have had about further consolidating the industry.

“In light of the significant commitments made by T-Mobile and Sprint as well as the facts in the record to date, I believe that this transaction is in the public interest and intend to recommend to my colleagues that the FCC approve it,” Pai said.

Pai’s two Republican colleagues on the five-member panel also announced their approval for the deal. 

Democrats and advocacy groups have expressed fear that the merger between the two telecommunication giants would further concentrate power in the industry and hike prices for consumers.

“Consolidation is a threat to progress and economic opportunity, not the driver of it,” Rep. David Cicilline (D-R.I.), who is chairman of the House Judiciary subcommittee on antitrust, said in a statement Monday. “Actual competition in the wireless market is critical to building out the next generation of internet and wireless services.”

Updated at 10:07 a.m.