Judge Puts T-Mobile Merger Trial on Fast Track -- 3rd Update
December 09 2019 - 6:02PM
Dow Jones News
By Drew FitzGerald
A federal judge told lawyers fighting over T-Mobile US Inc.'s
more than $26 billion bid for Sprint Corp. to skip their customary
opening arguments so they could start questioning witnesses, a sign
he is seeking a speedy trial.
As the case began Monday, U.S. District Judge Victor Marrero
asked both sides to trim their lists of witnesses to avoid beating
him "over the head" with testimony. The bench trial is scheduled to
carry into Christmas week but could last longer.
"What value do you see in opening statements in these
circumstances?" Judge Marrero asked one of the attorneys
representing T-Mobile.
Judge Marrero has heard high-profile cases dealing with
President Trump's tax returns, the USA Patriot Act and hedge-fund
manager Steven A. Cohen. His latest case will affect the structure
of a wireless market that serves hundreds of millions of cellphone
users.
A group of 14 attorneys general, led by New York and California,
sued in June to stop the wireless deal, which would combine the
country's third- and fourth-largest carriers by subscribers.
Federal antitrust and telecommunications officials approved the
deal in July, saying the merger's shortcomings were addressed
through concessions the officials required from T-Mobile and
Sprint. Legal experts say it is unprecedented for the states to
reject such a settlement and sue to block a merger of this size and
national scope without the support or involvement of federal
authorities.
Thirteen states and the District of Columbia decided to continue
their litigation despite the Justice Department settlement, which
required that Sprint divest itself of some assets to Dish Network
Corp. to help build its fledgling wireless unit.
Some states later dropped out of the lawsuit and joined the
Justice Department, though the core group of officials leading the
lawsuit remained unmoved. They also recruited a few more states
that hadn't initially joined the litigation.
California Deputy Attorney General Paula Blizzard said the
solution the federal government devised didn't fix the problem and
called Dish a struggling satellite-television company that lacks
the wireless-industry experience to replace Sprint's position as a
competitive force. "We have yet to be shown how going from four
competitors to three competitors would be good for consumers,"
California Attorney General Xavier Becerra said during a call with
reporters before the trial.
T-Mobile and Sprint announced their merger proposal in April
2018 after several months of stop-and-start talks. T-Mobile is
controlled by Deutsche Telekom AG, while Sprint is mostly owned by
SoftBank Group Corp. of Japan.
The companies scrapped an earlier effort to join forces in 2014
after the Obama administration signaled its opposition to the
deal.
The states' first witness, Sprint marketing chief Roger Solé,
testified to the company's efforts to lure subscribers away from
rivals, including T-Mobile. He was followed by Boost Mobile
executive Angela Rittgers, who explained how the prepaid service
pursues price-conscious customers.
The states also called Deutsche Telekom CEO Timotheus Höttges,
who answered questions about how the German telecom giant turned a
struggling U.S. subsidiary into the country's fastest growing
competitor.
Glenn Pomerantz, a lawyer for the states, said T-Mobile's parent
"dug into its pockets," plowed billions of dollars into the
company's network, and turned around its performance -- a point the
plaintiffs have highlighted to argue that Sprint and SoftBank could
do the same if left to keep fending for themselves.
Mr. Höttges acknowledged his company's help, though he also said
T-Mobile benefited from another key turn when AT&T Inc.'s
planned takeover of the carrier collapsed in 2011. That setback
armed T-Mobile with a $3 billion breakup fee, he said, the "real
ignition" for its eight-year success story.
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
December 09, 2019 17:47 ET (22:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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