Late Settlement Appears Unlikely in T-Mobile/Sprint Deal, Despite T-Mobile Hopes
Odds appear slim for a settlement with all the states challenging the T-Mobile/Sprint/Dish Network deal. New York and California, the states leading the federal lawsuit, are considered least likely to settle. At a financial conference last month, T-Mobile President Mike Sievert said a settlement after closing arguments appears possible (see 1912100029).
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Closing arguments are scheduled Jan. 15 before Judge Victor Marrero in the U.S. District Court in lower Manhattan. Witness testimony wrapped up Dec. 20, with analysts split on who’s winning (see 1912200043). New York and California attorneys general didn’t comment Monday. The companies also didn't comment. “The ship has long since sailed on a settlement,” said MoffettNathanson’s Craig Moffett: “For better or for worse, it’s in Judge Marrero’s hands now.”
It's tough to know what's motivating entirely Democratic state AGs "to pursue this unprecedented case which is effectively challenging whether two federal agencies are capable of doing their jobs," emailed LightShed Partners analyst Walter Piecyk. "It’s therefore impossible to know what it would take, if anything, for them to settle.”
Two weeks of trial didn't produce any new reasons for New York’s Letitia James (D) or other AGs to make a pact with carriers, but there's more pressure on carriers and Dish “to make better offers in the hope of driving a settlement,” emailed New York Public Utility Law Project Executive Director Richard Berkley. The consumer advocate saw nothing from the trial that would give AGs “greater incentive to settle rather than play out the litigation,” he said: New York AGs historically “take the consumer protection and structural change aspects of their position very seriously and zealously advocate in those areas.”
Politics would encourage California AG Xavier Becerra (D) to stay the course, emailed Tellus Venture Associates President Steve Blum, a consultant for California localities. “Becerra files high profile lawsuits with political objectives in mind, and he ducks lawsuits for the same reason.” The AG has filed many lawsuits against Trump administration views; he may view T-Mobile/Sprint in that light because federal agencies supported the deal, said Blum. “The worst thing he could do is accept a settlement that makes it look like he's caving in to the Trump administration -- it would be far worse than losing the case.” T-Mobile would probably make a substantial settlement offer to avoid a loss in court, but such an agreement would have “to look like a Becerra victory, if he's going to accept it,” Blum said.
“There isn't much that New York or California could get that they are not already getting,” said Roger Entner, analyst at Recon Analytics. “The previous settlements were huge victories where T-Mobile basically agreed to what it had already conceded to the DOJ and the FCC,” he said: “T-Mobile already announced a new call center in New York. I don't think two or three call centers would make a difference.”
“I would be quite surprised if there were a settlement now,” said Benton Institute for Broadband and Society Senior Counselor Andrew Schwartzman. “The states' case seemed to go reasonably well, and I can’t imagine what kind of settlement could address their stated concerns. … A favorable decision gives them everything.” A settlement at this stage would be a surprise, agreed Cowen’s Paul Gallant. “There might have been an opening earlier, but especially now after the trial it just feels too late for the states to take a deal,” he said.