California’s settlement with T-Mobile clears way for Sprint merger — here are the terms they reached

California Attorney General Xavier Becerra, who led a coalition of more than a dozen states in a challenge to the $26.5 billion merger of T-Mobile and Sprint, announced a settlement with the companies Monday morning that means the states won’t appeal a federal judge’s ruling against them last month.

“Despite the acrimony of litigation and lawsuits and court trials, you can really come to terms even with those with whom you go to battle in court,” Becerra said at a news conference (watch above.) “In this case, we didn’t see eye-to-eye in the way things were done by Sprint and T-Mobile, but we saw eye-to-eye enough to reach a settlement that included protections for California’s market and California’s people.”

Here are the full terms of the settlement, as described by the California AG in a news release.

  • Make low-cost plans available in California for at least 5 years, including a plan offering 2 GB of high-speed data at $15 per month and 5 GB of high speed data at $25 per month;
  • Extend for at least an additional two years the rate plans offered by T-Mobile pursuant to its earlier FCC commitment, ensuring Californians can retain T-Mobile plans held in February 2019 for a total of five years;
  • Offer 100 GB of no-cost broadband internet service per year for five years and a free mobile Wi-Fi hotspot device to 10 million qualifying low-income households not currently connected to broadband nationwide, as well as the option to purchase select Wi-Fi enabled tablets at the company’s cost for each qualifying household;
  • Protect California jobs by offering all California T-Mobile and Sprint retail employees in good standing an offer of substantially similar employment. T-Mobile also commits that three years after the closing date, the total number of new T-Mobile employees will be equal to or greater than the total number of employees of the unmerged Sprint and T-Mobile companies;
  • Create approximately 1,000 new jobs in California with a customer service center in Kingsburg;
  • Increase diversity by increasing the participation rate in its employee Diversity and Inclusion program to 60 percent participation within three years; and
  • Reimburse California and other coalition states up to $15 million for the costs of the investigation and litigation challenging the merger.

In his ruling last month, Judge Victor Marrero rejected three core arguments made by the attorneys general when ruling in favor of T-Mobile: That the combined companies would hurt competition; that Sprint could be a viable wireless carrier on its own; and that a deal to sell some of T-Mobile’s wireless spectrum to Dish Network wouldn’t be enough to prop it up as a competitive alternative.

New York’s Attorney General Letitia James, another leader of the coalition opposing the merger, had previously announced that New York wouldn’t be appealing the decision.

T-Mobile, based in Bellevue, Wash., and Sprint, based in Overland Park, Kan., announced plans to merge in April 2018, a deal that would create a $146 billion wireless carrier under the T-Mobile banner. Legere plans to step down from his executive role following the merger and T-Mobile COO Mike Sievert will take over.

We’ve contacted T-Mobile for comment and details on next steps in the Sprint merger.

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