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Here Are The 'Weird' Reasons The Sprint-T-Mobile Merger Is Taking So Long

062719_MichelCombes.JPG
Peggy Lowe
/
KCUR 89.3
Sprint CEO Michel Combes addresses employees at a work party on the lawn of the Sprint Campus in Overland Park on June 27, 2019, to mark the opening of a newly remodeled headquarters.

The singer in a cover band was belting a hip-hop song about the party being underway on the lawn of the Sprint campus when CEO Michel Combes got on stage.

Combes told the Sprint employees gathered outside on a late June afternoon that they were celebrating the remodel of the company’s headquarters at 6200 Sprint Parkway. What he didn’t say was that the new building was missing one big thing: a Sprint logo.

“It was a commitment to invest in our site and our buildings,” he said.

The other commitment Sprint officials have been working on is the proposed $26 billion merger with T-Mobile, a deal announced in April 2018 and not yet completed. Although two federal agencies have signed off on the merger, it still faces a legal challenge brought by 15 state attorneys general and the District of Columbia.

Analysts watching the 19-month process say it’s one of the lengthiest and strangest they’ve seen.  

“At every step, this process has involved things that have never happened before,” said Blair Levin of the Brookings Institution.

Levin, a former chief of staff to the Federal Communications Commission chair, said there are several reasons this merger is an anomaly:

  • Early on, FCC Chairman Ajit Pai said he would approve the plan, despite questions.
  • The Department of Justice sent the plan back to the company to be reworked.
  • A coalition of state attorneys general  a lawsuit to block the merger, citing anti-trust issues.

“In fact, usually the FCC, the DOJ, and the states are all on the same side,” Levin said. “In this case you actually have three different groups and really three different opinions. So it’s pretty weird.”
The state attorneys general filed a civil anti-trust lawsuit in June, the same month Combes was celebrating the campus remodel. The lawsuit said the proposed merger would hurt low-income consumers who rely on pre-paid services.

 “When it comes to corporate power, bigger isn’t always better,” said New York Attorney General Letitia James, who is leading the suit.

The lawsuit is set for trial in New York in early December. A decision isn’t expected until February, and T-Mobile CEO John Legere recently acknowledged that the deal won’t go through until next year.

Another factor making this process unusual: headlines about some of T-Mobile’s lobbying tactics after T-Mobile executives stayed at the Trump hotel in Washington before hearings on Capitol Hill.

“There have been some very unorthodox, some unusual happenings in this particular proceeding. So there’s certainly politics involved in this,” said Monica Alleven, an editor at Fierce Wireless.

A second building on the Sprint campus is currently undergoing renovations, making it look like the headquarters, where a WeWork-inspired open space look has replaced the marble floors and mahogany paneling of the past.

The Kansas City metro is home to 6,000 Sprint employees, and both companies promise that there won’t be job cuts.

KCUR's Peggy Lowe reports for Marketplace. She is on Twitter at @peggyllowe.

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