Nearly 50 months after T-Mobile's controversial $26 billion acquisition of rival U.S. mobile network operator Sprint closed, the worst fears of critics have been realized -- American consumers are paying significantly more each month for wireless service.

In a new report (first reported on in the U.S. by Light Reading), Finland's Rewheel Research claims that wireless markets with only three mobile network operators (MNOs) pay a lot more for wireless service vs. markets with four MNOs, as the U.S. once stood before T-Mobile gobbled up its No. 4 ranked rival. 

For certain plans, Rewheel said that consumers in three-MNO markets pay as much as three times more each month. 

"Five years on, the Sprint/T-Mobile 4-to-3 mobile merger made the U.S. one of the most expensive mobile markets in the world," Rewheel stated. "... After the merger prices in the U.S. either stopped falling altogether or fell at a much slower rate. The 4-to-3 mobile merger in the US led to higher prices and consumer harm."

Part of the Democratic minority on the FCC commission at the time regulators were reviewing T-Mobile's proposed M&A, current chair Jessica Rosenworcel argued to the Justice Department in 2019, "We've all seen what happens when markets become more concentrated after a merger like this one. In the airline industry, it brought us baggage fees and smaller seats. In the pharmaceutical industry, it led to a handful of drug companies raising the prices of lifesaving medications. There's no reason to think this time will be different."

For its part, the DOJ responded by engineering a provision ... that simply hasn't worked out. 

In July 2019, the Justice Department agreed to settle a lawsuit over the merger by requiring T-Mobile and Sprint to divest certain assets, including the Boost Mobile and Virgin Mobile prepaid businesses, that would enable Dish Network to replace Sprint as America's fourth MNO. 

These days, however, Dish and its parent company, EchoStar, appear significantly closer to entering bankruptcy court than they are finishing completion of a nationwide 5G wireless network and operating a full-fledged post-paid wireless business. 

Shenandoah Telecommunications shareholders will receive a special cash dividend of $18.75 for every share of the telecom company they own on Aug. 2, about one month after the company completed the sale of wireless assets to T-Mobile.

Shentel agreed to sell wireless assets with about 1.1 million subscribers to T-Mobile for $1.95 billion in cash in February. 

T-Mobile bought Sprint in April 2020 for $26 billion and as part of that deal had an option to purchase Shentel’s wireless assets after an appraisal process. Shentel, which had been a Sprint affiliate since 1999, conducted the appraisal in 2020 that placed the value of the assets at $2.1 billion. After a series of negotiations, T-Mobile and Shentel agreed upon the $1.95 billion price. 

At the time Shentel said it would use the proceeds of the sale -- about $1.5 billion after taxes -- plus $195 million of cash on hand to pay down about $702 million in debt and issue the dividend to shareholders. In a letter to shareholders on July 6, Shentel president and CEO Christopher French said the sale was completed on July 2 for $1.94 billion after adjustments and certain transaction expenses.

The company has said it will reinvest about $19.6 million of the special dividend in shares of Shentel stock through its dividend reinvestment plan over a period of 30 days after the dividend payment date. It expects that the total payout to Shentel shareholders, before any reinvestments, will be about $936.6 million. 

The $18.75 per share dividend is payable on Aug. 2 to shareholders of record as of July 13,, the company said. Because the special dividend is more than 25% of the current share price, as per NASDAQ rules the stock will trade ex-dividend beginning on August 3, the first business day after the payment date, the company said in the press release. The trading price will then reflect the value of the stock without the special dividend.

Shentel stock has spiked over the past few days -- it was up 15.5% on July 2 and another 7.6% on July 6 after news that the T-Mobile deal had been completed was released. In a research note, Raymond James analyst Ric Prentiss, who downgraded the stock to “sell,” said the increase was due to “significant retail buying based on the headline of the special dividend declaration,” according to website seekingalpha.com.  The stock was trading at $56.38 on July 7, down $4.53 per share or 7% each. 

“The completion of the wireless sale and payment of the special dividend are significant milestones in the company’s almost 120 years – and we are excited to begin a new chapter in our long and successful history,” French said in the press release. “Going forward, we are a broadband-centric company, focused on growing our cable, Glo fiber, Beam fixed wireless, and commercial fiber businesses. We believe we have the experience and expertise to continue to execute on our growth strategy, providing quality telecommunications services to our customers and the communities we serve.”

T-Mobile is now in the advanced stages of integrating Sprint, the wireless competitor it paid $31 billion to acquire a year ago. T-Mobile isn't offering its new unlimited customers free access to two major SVOD services going forward. 

"Legacy Sprint customers with an active free Hulu promotion can continue to enjoy Hulu on us," a T-Mobile rep told Next TV.

Since 2017, Sprint has offered new unlimited wireless data customers free access to the $5.99-a-month base version of Hulu. But with the merger, there are no more "new" Sprint customers. 

On the internet, prospective Sprint customers are now directed to T-Mobile’s main landing page, where they can choose from a variety of T-Mobile “Essentials”- and “Magenta”-branded unlimited wireless calling and data plans. Each of these plans offers “Netflix on Us,” a promotion that delivers free access to Netflix’s base $8.99 tier. 

We—perhaps naively!—pondered the possibility a year ago of T-Mobile unlimited plans underwriting basic offerings for two major SVOD platforms.

That dream was nice. But it's dead now. 

T-Mobile has had its Netflix on Us promotion in place since 2017. And it had been offering free access to the $4.99-a-month Quibi platform until that service went belly-up last year. 

Sprint established its own promotional deal with Hulu in 2017, when the subscription video service was still a joint venture between Comcast, Disney, a pre-Disney-owned Fox and the erstwhile Time Warner Inc. To be eligible for the promotion, Sprint customers must not only subscribe to the base ad-supported version of Hulu, they can't also bundle Hulu with Disney Plus and ESPN Plus--a major tentpole to new controlling owner Disney's go-to-market digital strategy. 

T-Mobile’s video strategy has evolved quickly of late. The wireless company just scrapped its six-month-old virtual pay TV service, TVision, and its now marketing Google’s vMVPD, YouTube TV, as well as skinny live streaming bundle Philo, to its unlimited and fixed 5G wireless customers. 

Notably, T-Mobile confirmed last week that it’s just launched fixed 5G service, T-Mobile Home Internet, doesn’t support Hulu’s vMVPD, Hulu + Live TV. 

The hottest new “TV” company out there just might be a mobile phone provider. More interestingly, it’s not long-time telecom giant AT&T, which bought what’s now called WarnerMedia for $85 billion back in 2018, and has launched streaming service HBO Max. 

No, the potential new video contender is “Uncarrier” T-Mobile, which is coming off a remarkable 2020, where it finally completed a $37 billion merger with Sprint after two years, three attempts, a court challenge and much other drama.  

That would have made 2020 monumental enough in the 13-year history of the Deutsche Telekom U.S. subsidiary. But there’s plenty more going on. 

As part of the Sprint deal, for instance, T-Mobile is selling low-end provider Boost Mobile (along with spectrum and other assets) to Dish TV, which hopes to transform from bargain-rate satellite TV company to replace Sprint as the nation’s No. 4 wireless service. 

Also last year, “New T-Mobile” issued the 2020's largest bond sale, $19 billion, to finance part of the Sprint acquisition. Separately, T-Mobile announced an expected $6 billion in merger savings and named a new CEO to succeed the flamboyant John Legere (with a new CFO on the way). 

New T-Mobile’s new CEO, Mike Sievert, said the company would immediately begin “lighting up” more components of its 5G network, which already covers about 200 million Americans. 

T-Mobile also has surprised observers by quickly adding loaned spectrum to its network under a federal effort to make underutilized bandwidth available to wireless providers amid the pandemic. 

Oh, and there’s that COVID-19 pandemic, which promises to complicate a great many companies’ plans for months or years to come. The continued lockdown and potentially lengthy recession likely will depress consumer appetite for expensive 5G-enabled phones, or the data plans for those networks.

In that regard, T-Mobile may be well positioned. Under terms of the Sprint merger, it already had committed to not raise prices for three years, and not to charge more for 5G access. For bargain hunters wanting to upgrade, it may be the place to go.

As it is, analysts estimate that T-Mobile already typically charges 10% - 20% less than industry behemoths Verizon and AT&T. That may be a big advantage in the 5G rollout, especially if a COVID-19 recession proves durable and deep.

T-Mobile claims its low-band Extended Range 5G network already covers more than 1.6 million square miles and 280 million people in 5,000 cities and towns. The initial network is on the 600 MHZ band, and will expand to its big supply of  2.5 GHz spectrum during the Sprint consolidation. The company also touts its Ultra Capacity 5G (mid-band and mmWave), which reaches 106 million people in 2,400 cities and towns.

Overall, the merger of T-Mobile and Sprint gives the combined company 140 million connections, putting it between AT&T (166 million subscribers) and Verizon (122 million) in market share. 

Magenta Haze

Amid all this, T-Mobile is continuing to get involved in the distribution of streaming video of various sorts. 

For several years now, T-Mobile has given subscribers a free year of Netflix as part of its most popular multiline plans. And before the merger, Sprint gave its customers free Hulu. 

Now, new customers are getting Netflix Basic for free.

T-Mobile also launched its own take on a not-very-skinny bundle, or virtual MVPD, about a year before the merger. 

TVision, which is based on the same SEI Robotics HDMI dongle used for Dish Network’s Android TV-powered connected TV product, AirTV Mini, offers 154 channels (in my zip code, before 275 add-ons), 1 terabyte of DVR storage (about 400 hours of recordings), integration with Google Assistant and Amazon Alexa, and access to streaming services and social media. All that costs $90 for the base package, before all those add-ons. 

TVision doesn’t break much ground compared to other increasingly pudgy and pricey bundles of traditional TV channels delivered over broadband, such as Hulu + Live TV and Google TV. 

Also Read: T-Mobile’s TVision: It’s the Video Multitool that Wireless Rivals AT&T and Verizon Lack (Review)

What is different, however, is what T-Mobile promises that TVision will become.

“Though currently on wired broadband, we’re planning for a 5G future where wireless broadband will replace home internet,” the company said on its TVision website. "That means millions across America will finally free themselves from expensive, unreliable cable companies once and for all.”

“Fixed wireless” is what the phone companies call the wireless 5G modems they want to place in customers’ homes to supersede the cable companies’ hard-wired broadband systems. 

With 5G, analysts estimate that T-Mobile will be able to realize speed gains of perhaps eight times today’s broadband within a couple of years. Within six years, when T-Mobile plans to finish building out its network, 5G speeds could hit 15 times the current speed of broadband. 

That kind of speed and low latency could be a game-changer, enabling everywhere access to everything from augmented/virtual reality experiences to cloud-based video-game streaming to interactive online video, especially if it’s overlaid with data services for pursuits such as sports gambling. 

And, as the pandemic is showing, the potential for living-room-based performances, classes, talk shows and more of increasing sophistication and production values are likely to create new kinds of content opportunities. 

Fixed wireless in the home, even in homes in the relatively remote communities where some portion of the population is likely to move in coming months, could make all that possible. 

Also Read: Fixed and Dilated

The FCC approved the T-Mobile acquisition of Sprint in part because it could help drive 5G adoption, but also because the agency said it could help bridge the digital divide for households not currently served by cable, or unable to afford their neighborhood’s only provider.  

Offering most of the goodies of traditional TV with more flexibility on price/delivery pipe/location is one way T-Mobile hopes to entice new customers. It also may help justify the expected $40 billion investment T-Mobile will need to build out its 5G network. 

Though Verizon is likely to have an early advantage in the 5G rollout, thanks to a couple of Qualcomm technologies, some analysts suggest T-Mobile may be better positioned over the long run.

The key will be getting all the Sprint spectrum fully deployed, according to Walter Piecyk and Joe Galone of Lightshed Partners. Once in place  as soon as next year, that plentiful spectrum should provide T-Mobile with a significant advantage.

“We believe T-Mobile will ultimately execute on this opportunity, but the integration of Sprint, clean-up of the 2.5 GHz spectrum, and changing management team could create a bumpy ride over the next six months,” Piecyk and Galone wrote in a recent report. “The closing of the deal will be a positive catalyst, but what follows next is less certain.”

Wells Fargo analyst Jennifer Fritsche suggested in a report that T-Mobile is more vulnerable to a recession’s depredations, because its business is almost all wireless, and thus more dependent on subscriber growth to drive service revenues.

Over the past five years, T-Mobile stock rose an estimable 176%, thanks to growing subscriber and revenue numbers under Legere, who remains on the company board. It’ll be difficult to match those gains going forward, at least for a while. 

The mobile market has matured. Most users have “unlimited”data plans, and they’re upgrading handsets less frequently. The pandemic isn’t translating to more mobile usage as homebound customers watch more streaming video over WiFi on bigger screens. The burgeoning recession definitely won’t encourage splurging.

More importantly, T-Mobile is navigating a 3D chess version of corporate transformation. It’s negotiating a leap to powerful new distribution technologies amid significant political crosswinds, merging complex tech systems, breaking in new top executives, and doing it all amid a world-changing pandemic and recession. 

Amid all that, can a remade T-Mobile also become a media power, providing millions of people with fast, cheap, and powerful bandwidth and entertainment wherever they are? Can it be more than just a third-string mobile carrier with a garish brand color and equally noisy (if effective) CEO? 

That’s T-Mobile’s next challenge after a prodigiously transformative April. It should be a remarkable year to come.

Dish Network said it will purchase Republic Wireless, a mobile operator with about 200,000 customer relationships, for an undisclosed sum.  

Republic Wireless provides service via a Mobile Virtual Network Operator (MVNO) agreement with T-Mobile. Dish, which is in the process of building its own 5G wireless network, has agreed to buy spectrum from T-Mobile and also operates a prepaid wireless business (Boost Mobile)  which uses T-Mobile’s network. 

Also Read: Dish: No Partner Needed for Wireless Dance 

This is the second small wireless acquisition Dish has made since agreeing to buy about $3.6 billion in wireless spectrum from T-Mobile over three years (and the Boost Mobile business for another $1.4 billion) in 2019  as part of the larger company’s purchase of Sprint. In August, Dish agreed to purchase prepaid phone company Ting Mobile.  As part of the Republic deal, Dish said  SVP of Ting Mobile and MVNO platform Rob Currie, will lead the Republic Wireless business.

"Republic has created a loyal following and established a brand known for innovation, customer service and value. We plan to build upon that strong foundation," said Dish chief operating officer and president of its Retail Wireless unit John Swieringa, in a press release. "As we continue to grow our retail wireless business, Republic broadens our existing customer base and positions us to deliver even more value to the market, expanding our portfolio of mobile solutions to meet a variety of customer needs. We look forward to welcoming Republic customers to the Dish family."

After the deal closes, expected in the second quarter of this year, Republic’s Relay division, which provides communications service to hospitality, healthcare, facilities management, manufacturing and education clients, will continue to operate as a standalone  company. Relay will also become a wholesale customer on Dish’s 5G network. 

As it moves ahead to build out its planned 5G wireless service, Dish Network is facing a new dilemma after T-Mobile said it would decommission its 3G CDMA network service on Jan. 1, 2022, a move that could effectively cut Dish-owned Boost Mobile's prepaid wireless business off at the knees.

Dish revealed in its 10-K annual report that T-Mobile would discontinue the CDMA network. T-Mobile sold Boost Mobile to Dish in 2019 for about $1.4 billion in a side deal related to T-Mobile's purchase of Sprint for $26 billion.  

In the filing, Dish said the decommissioning would have a “material adverse effect” on its wireless business. Dish must either migrate Boost’s 9 million customers more quickly to the network Dish hasn’t built yet, purchase an enormous amount of new handsets to allow Boost customers to access T-Mobile’s 4G network or suffer a torrent of wireless customer defections. Dish appeared, during a conference call with analysts to discuss Q4 results, to be gearing up for the defection scenario. 

“It’s hard to upgrade, to go from a phone that works great and works in their territory, and then go to another phone that won’t even work on our network, because we’re 5G,” Ergen said. “So then we have to upgrade them again. So if you run the numbers on that, there would be significant fallout from that, in my opinion.”

Also Read: Dish Wireless Pushed Forward 

Boost Mobile has about 9 million customers, so providing new handsets to those customers would be a logistical nightmare. Ergen said it might even be impossible to execute. 

“I don’t even think we could get the supply of the phones that we would need,” Ergen said. “You can’t order phones and not know that you can move the phones, and the supply is somewhat limited for the kind of phones we might need for that. So that’s a material risk that’s out there on Boost.”

Boost has been losing subscribers already, shedding about 363,000 customers in Q4 and 212,000 in Q3. But the service has very high EBITDA margins compared with other wireless businesses. Boost Mobile's wireless profit margin was 16.3% in Q4, higher than the 10% margin for similar prepaid services like Tracfone, and more than five times the 3% margin some analysts expect for the 5G wireless service when it becomes available.

On the call, Ergen said Boost Mobile's profitability likely was not sustainable, a fact exacerbated by T-Mobile’s plans to decommission the network.

“Unfortunately, the revelation about having to migrate its customers off CDMA so quickly suggests a very challenging year ahead, both for subscribership and for costs,” MoffettNathanson principal and senior analyst Craig Moffett said in a research note.  

Aside from providing a steady wireless revenue stream while it moves to build out its 5G network -- Boost revenue was about $1.2 billion in Q4 -- the prepaid service was supposed to serve as a springboard for the larger postpaid offering once it was launched. According to Moffett, Boost was expected to provide a retail brand, store locations and a customer base that could eventually be converted to Dish’s 5G network. 

Dish might be able to get some relief from the federal government, or at least more time to migrate customers. Asked on the call if he had contacted the Federal Communications Commission about T-Mobile’s CDMA shutdown, Ergen said he hadn’t spoken to the agency personally, but it is possible one of his staff may have. He said he believed T-Mobile’s decision to discontinue the CDMA service was anti-competitive. He noted that Boost customers are “economically challenged,” and that removing one of their options to access affordable wireless services, especially during a pandemic, seems to go against the motivation for allowing Dish to buy the service in the first place -- which was to maintain a fourth national wireless provider. 

“We are one of four providers,” Ergen said. “Washington picks winners and losers, and they make policy that affects people one way or the other. And we’ve had some good luck, we’ve had some bad luck with that, as have others.”  

Shenandoah Telecommunications (Shentel) said it will sell its wireless assets to T-Mobile, part of the larger telecom company’s purchase of Sprint last year, for $1.95 billion in cash and will use the proceeds to pay down some debt and issue a special cash dividend to its shareholders. 

Shentel said the deal, expected to close in the second quarter, will bring it about $1.5 billion after taxes. Those proceeds will be used to pay down about $702 million in debt and to issue an $18.75 per share cash dividend to shareholders. Shentel shares closed at $42.23 each on Feb. 2 up 6.5%, or $2.59 each. The stock was priced at $50 per share, up 18.4% or $7.77 each, in pre-market trading Feb. 3. 

T-Mobile purchased Sprint in April for $26 billion and as part of that deal had the right to exercise an option to purchase Shentel’s wireless assets after an appraisal process.  Shentel has been a Sprint affiliate for its wireless service since 1999.  That appraisal was conducted in 2020, ultimately pinning a $2.1 billion value on the operations . After a series of negotiations, the parties agreed on a $1.95 billion price.   

Shentel’s wireless service has about 1.1 million customers and provides service in a six-state area covering all of West Virginia, the Western region of Virginia, Central Pennsylvania, Central Maryland and parts of Ohio and Kentucky. The unit has about 400 employees and generates about $400 million in revenue per year. 

“We are pleased to provide clarity on the expected sale price of Shentel Wireless and our ability to return significant value to our shareholders,” said Shentel CEO Christopher French in a press release. “The expected transaction closing in the second quarter along with the continued rapid expansion of our Glo Fiber to the Home and Beam fixed wireless services are part of our transformation to a broadband centric company. Shentel has a long history of growth and technology innovation and we are very excited about the new opportunities to bring state-of-the-art broadband to our customers and create value for our shareholders.” 

Verizon Communications said Monday that it has agreed to purchase prepaid wireless giant Tracfone for $6.25 billion in cash and stock. The deal is expected to close in the second half of 2021.

Tracfone, owned by Mexican wireless giant America Movil, is the largest reseller of  wireless services in the U.S., with 90,000 retail locations and more than 21 million customers. Verizon already has a relationship with the company -- about 13 million Tracfone customers currently rely on the Verizon wireless network via an existing wholesale agreement.  

Verizon said in a press release that after the deal is completed, it plans to sell 5G service to Tracfone customers, as well as further develop the prepaid wireless giant’s distribution channels and expand its market opportunities. 

“This transaction is aligned with what we do best: providing reliable wireless service alongside a best-in-class customer experience,” Verizon chairman and CEO Hans Vestberg said in a press release.  “We are excited about the opportunity to bring Tracfone and its brands into the Verizon family where we can put the full support of Verizon behind this business and provide exciting and compelling products into this attractive segment of the market.  We are pursuing this important strategic acquisition from a position of strength given our very strong and prudent financial profile.”

The deal includes about $3.125 billion in cash and $3.125 billion in Verizon stock. In addition, American Movil could get an extra $650 million in cash if Tracfone hits future certain performance targets. Verizon said it expects the deal to be accretive in its first full year after the close, adding that it will bring Tracfone’s 850 employees into the fold. 

Verizon shares were up about 1% (80 cents each) to $60.49 per share in early trading Monday. 

“We’re looking forward to welcoming all of Tracfone’s customers and each of Tracfone’s nearly 850 valuable employees,” Verizon Consumer Group EVP and Group CEO  Ronan Dunne,  said in a press release.  “We are excited to expand our relationship with Tracfone’s distribution partners, and when Tracfone’s customers become part of our family, they will get the best of both worlds – more choices, better services, and new features thanks to Verizon’s investment – but with the flexibility and control that they have come to value with its prepaid plans.  Being connected is now more important than ever, and Tracfone customers will benefit from Verizon’s innovations – both now and in the future.”

The deal comes about two months after Dish Network purchased prepaid wireless company Boost Mobile for $1.4 billion, as part of the regulatory concessions T-Mobile made to complete its $26 billion buy of Sprint.  Boost has about 9 million prepaid wireless customers in the U.S., and Dish has planned to operate that business alongside its planned post-paid wireless offering. 

Credit Suisse acted as financial advisor to Verizon and Debevoise & Plimpton acted as legal advisor.

T-Mobile said it has agreed to purchase wireless assets with about 1.1 million customers from Shenandoah Telecommunications, part of an earlier agreement the CLEC had with Sprint Communications, but the parties still have to agree on price.

ShenTel has had an affiliate agreement with Sprint for more than two decades, and has about 1.1 million wireless customers in parts of West Virginia, Maryland, Kentucky, Ohio and Pennsylvania. Sprint was purchased by T-Mobile in April for $26 billion. 

When T-Mobile exercised its right to acquire the Shentel wireless properties, it triggered an appraisal process to determine the business value to be paid by T-Mobile. Shentel said in a press release the process could take “at least several months.” 

Shentel’s wireless business generates about $400 million in annual revenue and has around 400 employees. According to Shentel, it had been in talks with T-Mobile about the framework of the appraisal process prior to the telecom company exercising its option, but the parties were unable to agree on terms.

“Over the last 21 years, the dedicated employees of our wireless business have charted an enormously successful path in the wireless industry,” said Shentel CEO Christopher E. French said in a press release. “We have built the best performing wireless network, deployed an unmatched footprint of stores and kiosks and provided industry leading customer service to over 1 million mostly rural subscribers in our region. Without Shentel, many of our wireless customers would not have otherwise had a reliable provider they could count on for critical connectivity to keep in touch with loved ones or to support their livelihood.”

FCC Chairman Ajit Pai welcomed the news Wednesday that T-Mobile had completed its $1.4 billion spin-off of low-cost prepaid business, Boost Mobile, to Dish, as did DOJ antitrust chief Makan Delrahim. 

Related: Dish Closes Boost Mobile Deal

That was one of the T-Mobile-Sprint deal conditions imposed by both Justice and the FCC, one that was designed to help seed a potential facilities-based wireless service to compete with AT&T, Verizon and the new T-Mobile. 

For the near term, Dish will operate its wireless service over Sprint facilities, but the idea is for it ultimately to use its own spectrum. 

“Today, we are proud to welcome hundreds of employees, thousands of independent retailers, and millions of customers to the DISH family,” said Dish President Erik Carlson. “This marks an important milestone in DISH’s evolution as a connectivity company. It positions us well as we continue to build out the first virtualized, standalone 5G network in America.” 

“I’m pleased to see that T-Mobile has met one of its most important merger commitments,” said Pai. “Today’s action is a key step towards promoting vigorous competition in the wireless marketplace, particularly for price-conscious consumers in our nation’s cities. I also welcome DISH’s entry into the mobile industry. With this divestiture and its existing spectrum resources, DISH has the potential to make a big impact on a wireless marketplace that is transitioning to 5G, the next generation of wireless connectivity." 

“I congratulate T-Mobile and Dish for closing the Boost divestiture as required under the Final Judgment,” said Assistant Attorney General Makan Delrahim, who heads the Department of Justice's Antitrust Division. “This deal is a significant milestone in realizing the Department of Justice’s remedy, which is designed to strengthen competition for high-quality 5G networks and benefit American consumers nationwide.”

Dish Network said it has completed its purchase of Boost Mobile Wednesday, paying $1.4 billion for its 9 million prepaid wireless customers.

The purchase was part of the conditions Boost parent T-Mobile agreed to in securing federal regulatory approval of its $26 billion purchase of Sprint Corp. As part of those conditions, T-Mobile also agreed to sell 800-Megahertz wireless spectrum to Dish for about $3.6 billion over three years.

“Today, we are proud to welcome hundreds of employees, thousands of independent retailers, and millions of customers to the Dish family,” Dish CEO Erik Carlson said in a statement. “This marks an important milestone in Dish’s evolution as a connectivity company. It positions us well as we continue to build out the first virtualized, standalone 5G network in America.”

Although Dish had always expected to close the deal by July 1, earlier this month there was speculation that chairman Charlie Ergen was trying to negotiate a better deal. Although the price didn’t change, Dish said it has secured a seven-year agreement for Boost Mobile to run on T-Mobile’s superior 5G network, including the ability to serve Dish customers between new T-Mobile's nationwide network and Dish’s forthcoming standalone 5G network.

“The FCC and DOJ have shown continued leadership in advancing the nation’s 5G wireless future, and thanks to their efforts, Dish is able to focus our resources on building the only 5G network in the U.S. based on Open RAN architecture, completely from the ground up,” said Carlson.

Dish said Boost Mobile will retain its brand name and will be led by Dish chief operating officer and group president, retail wireless John Swieringa.

“Boost is uniquely positioned to disrupt this industry. Our passionate team, from employees to retail associates to local business owners, is ready to compete,” Swieringa said in a press release. “We’ll bring new, exciting products and offers to customers that better meet their needs and fit their budgets.”

The service also will launch a new wireless plan on July 2 -- dubbed $hrink It! -- aimed at keeping prepaid customers longer. According to Boost, the $hrink It! Plan starts at $45 per month for 15 GB -- a $5 discount -- and rates fall an additional $5 after three on-time payments are made, and decline another $5 after six total on-time payments. Boost previously offered a shrinking payments plan that was available to new Boost Mobile customers until July 2014.

Boost also will offer a $35 10 GB plan that includes unlimited talk and text. Consumers may sign up for either plan with their existing compatible device or by purchasing a new device from Boost. Both plans will be available beginning July 2.

Dish said it continues to make progress on its 5G network deployment and recently announced the selection of Fujitsu for radio units and Altiostar and Mavenir for cloud-native, Open RAN software. 

In coming months, you’ll be hearing a chorus of boosters singing the praises of 5G mobile technology at an increasingly insistent and noisy level, as they bet many tens of billions of dollars and perhaps the nation’s industrial future. The new ultra-high-speed, high-capacity connections in 5G promise to transform everything from healthcare to TV production and distribution to farming, they say. 

“5G offers tremendous possibilities for consumers across the country, but it’s also an issue of national competitiveness,” said FCC Chairman Ajit Pai in a recent Fox Business interview. “5G is going to transform entire industries. We want to make sure America leads in that transformation.” 

We’ll have a better chance to evaluate what 5G means in a few months, when Apple is expected to launch its first 5G-enabled iPhones. Apple is likely to announce details of those new models at its World Wide Developers Conference, June 22-26.

Also read: 5G Is Here — And for Real This Time

Actual arrival of the 5G iPhones, probably somewhat delayed by COVID-19 impacts and economic uncertainties, is now more likely to come sometime between October and December, according to close observers of Cupertino smoke signals.

Whenever those 5G models arrive (5G-enabled Android phones from several companies have been available since last year), the carriers will have spent many months and billions of dollars to optimize their networks for an expected influx of new customers. Given that, expect heavy promotion of 5G’s potential as the carrier contenders try to surf Apple’s monstrous marketing wake.

Eighteen Times Faster Than 4G?

So what exactly will they be promoting? Most simply, 5G is the next generation, the fifth, in mobile phone technologies. Depending on a particular carrier and where you’re accessing it, 5G  offers dramatically higher speeds, extremely low latency, and/or wide coverage for more  sparsely populated areas.

Just don’t confuse it with the 5-gigahertz band of on your home WiFi network. That’s a different beast, the 5G shorthand appended to your network’s name to connote which frequency, or slice of spectrum, is connecting the internet signal on the router in the corner the computer on your kitchen table. 

To further clarify 5G’s technical complexities, we can actually use of that same WiFi router as illustration. Routers these days use a 2.4-gigahertz frequency band and one or two 5-gigahertz frequency bands as options to transmit the same WiFi channel. One frequency (5-Ghz) is faster, while the other is better at penetrating walls and carrying more data. 

In much the same way, 5G mobile uses multiple swathes of spectrum, generally designated as high-, mid- and low-band. Which bands a given carrier’s network uses will vary from city to city, and urban to rural settings. 

The fastest band is so-called millimeter-wave, great for densely populated urban areas but requiring an equally dense array of refrigerator-sized cell transmitters because its signal doesn’t go very far, and often is stymied by walls and solid objects. Low-band, as with the 2.4Ghz WiFi signal, does a better job reaching much further, and through more obstacles. Mid-band strikes a balance, and is useful for more suburban settings. 

The speed and capacity you might access on a 5G network, especially here in the early days, can vary widely. All the big carriers and their would-be challengers have been spending vast sums to install the neighborhood transmitters and other equipment in cities across the country.

Already, the fastest installed 5G networks are as much as 18 times faster than the 4G equivalents provided by the same carriers, according to recent studies.

Those multiples are only possible where users have access to the millimeter band services that Verizon is emphasizing. They can hit 2 gigabit-per-second speeds (compared to 4G speeds that typically max out around 14 to 18 Mbps) but have very short reach and don’t penetrate building walls and other obstacles very well. 

And as 5G becomes more universally available, and networks more fully built out, it should be transformative. 

For its part, Pai’s FCC has focused on three key initiatives under its so-called FAST plan: a) make more spectrum available; b) speed up approvals to build more transmitters and other local architecture; and c) make it easier to lay the back-end fiber-optic cables that will connect all that traffic to the internet. 

The agency also set aside $9 billion to finance 5G build-outs in rural areas that “never would have a business case for laying wireless,” Pai said. Depending on the topography and other factors, 5G could bring broadband to long-neglected rural areas, not only improving consumer access there, but boosting the productivity of farms and ranches trying to manage their far-flung crops, crews and machinery. 

Many other sectors are headed to a 5G-fueled reboot, too. 

Pai points to telemedicine, vital amid the COVID-19 lockdown, but potentially transformative even in more normal times, with services like remote monitoring of diabetics’ blood-sugar levels, stroke-symptom tracking and long-distance robotic surgery. 

5G will bring the speed, capacity and latency needed to build out important, but nascent sectors such as autonomous vehicles and the so-called Internet of Things, which promises fleets of net-connected smart devices in every home and workplace, communicating wirelessly with each other, with you, and with the rest of the internet. 

Various corners of entertainment and media are ripe for 5G, too, beginning with mobile gaming and virtual and augmented reality. 5G will give mobile users access to richer, higher-resolution and more complicated experiences wherever they are. 

It even has huge implications for more traditional entertainment. 

For one thing, 5G promises to further upend already struggling traditional pay-TV, which pipes high-quality video into the home by way of co-axial cable attached to a headend or satellite dish. So-called fixed-wireless will bring 5G mobile to all the devices in a consumer household without WiFi’s bandwidth limits or cable TV’s wires and restrictions. 

Satellite TV provider Dish Network is trying to avoid that disintermediation, remaking itself into a fourth wireless carrier. That process is very much still in transition, however. Two pending deals with T-Mobile remain unsettled, awaiting Department of Justice decisions. But expect, eventually, that Dish will acquire Boost Mobile for around $1.4 billion, launch an initially slow 5G network virtually on other companies’ backbone services, and then build out its own 5G network within  three years.  

Cable giants Comcast and Charter Communications are among those trying to create their own attractive alternative to 5G, bundling virtual mobile (MVNO) services on top of their pay-TV and broadband offerings, while enhancing their hardwired networks to become what they’re marketing as “10G,” as in twice as fast as 5G. Whether consumers will bite on the marketing speak will be another big question to resolve in coming months. 

Also read: Cable Industry Set to Plug ’10G’ at CES

Broadcasters around the world also see 5G as a significant addition to their production toolkit, including replacing some satellite video transport, handling live or remote video production, and as cost-effective backup for contribution links, according to a new Nevlon survey of broadcasters in North America and three other continents.

Some 92% of the 225 broadcasters said they plan to adopt 5G within two years, a remarkable uptake plan that suggests its huge potential. 

Most survey participants also said they believe their country’s 5G infrastructure will be able to handle the demands of video production. About two-thirds expect to use the technology for remote production. 

“It’s positive that broadcasters are expecting to move forward at pace with 5G,” said Nevlon chief technologist Andy Rayner. ”However, there is still a lot of work to be done before it can be implemented into live environments, and given the current climate worldwide, testing and developments may have slowed down. Over the next year or so, it will be a case of broadcasters looking in earnest at the potential of 5G in the value chain and testing the technology’s capabilities within their organizations.” 

As for the Big Three wireless carriers, 5G promises to shove them ever more centrally into everything we do. 

They’re going about it with differing strategies, and all three have had other distractions and initiatives. But make no mistake, all are counting heavily on 5G as the foundation of their future.

AT&T

As for distractions, AT&T has had an expensive one: buying Time Warner Media for $85 billion in 2018, restructuring it into WarnerMedia, and then launching the priciest subscription streaming-video service yet, the confusingly named HBO Max. 

But HBO Max arrived in May at a propitious time for the company. AT&T’s legacy pay TV systems—DirecTV and U-verse—have been hemorrhaging subscribers. And the IP-based platform intended to replace them, AT&T TV, has so far been coolly received.

Also read: AT&T TV: Everything You Need to Know About the Streaming Version of AT&T’s Premium Pay TV Service

AT&T still has some work to do on HBO Max, including cutting distribution deals with device platforms Roku and Amazon Fire TV, which together reach 80 million U.S. households, and launching a promised free, ad-supported tier. 

But now it has an attractive chip to throw in when trying to sign up and keep 5G customers. As more consumers understand the advantages of 5G and the many offerings on HBO Max, that could pay off handsomely. 

In late June, AT&T announced the addition of 28 5G city deployments, including Dallas, Miami and Salt Lake City, bringing its total U.S. deployment to 355 cities. 

The Anti-AT&T

Verizon’s approach, by contrast, is the anti-AT&T, choosing to focus almost exclusively on building out the fastest network available right now. 

Verizon shifted focus in 2019, when it named former Nokia chief executive Hans Vestberg as its CEO. He has de-emphasized previous CEO Lowell McAdam’s numerous content initiatives and acquisitions (Yahoo, AOL, Tumblr, Go90/Vessel, Huffington Post) in favor of more network buildouts.

Verizon, which for years marketed its 4G network’s strong reputation, may be positioned to do the same thing here in 5G’s early days. It will leverage two Qualcomm technologies that optimize networks—Carrier Aggregation and Digital Spectrum Spreading (DSS)—to grab the speed lead just as the iPhone 5G arrives.   

A report in late May from mobile analytics company OpenSignal looked at 5G networks from 10 companies in four countries, and tabbed Verizon as the fastest, by a lot. A company spokesman said “speed and performance…become even more important as many consumer and industries will have to rethink how they operate post-COVID.” 

The company already has 5G networks in 35 U.S. cities as of late May, Vestberg told CNBC’s Jim Cramer, and it accelerated capital spending when the pandemic sent telecom demand skyrocketing.

“We’re building 5G right,” Vestberg said. “We want to have a superior experience on 5G, and it’s not only the consumer who gets this experience. Industry and government are going to have to have it to transform their businesses. It’s 10, 15, 20 times faster than we have on 4G.”

In the middle of the lockdown, Verizon also snapped up video-conferencing company Blue Jeans for $500 million. The acquisition dovetailed nicely into its broader 5G strategy around services such as telemedicine and online learning, which could be huge opportunities, even if COVID-19 concerns ease. 

“You’re going to see improvements over time, then dramatic improvements,” Vestberg said. “We are accelerating our investment levels right now because it’s even more important to have these connections now.”

Layer Cake

T-Mobile grabbed industry bragging rights earlier this month when a deal with an Alaskan provider allowed it to say it was the first U.S. carrier to have 5G networks in all 50 states. 

More broadly, T-Mobile is taking what it’s calling a “layer cake” approach that matches its basket of owned or controlled spectrum with the needs of different regions. 

Deutsche Telekom’s U.S. subsidiary has been ramping up its 5G capabilities amid its own remarkable corporate makeover.

Also read: Bigger ‘Uncarrier’ Looks to Become a Force in Streaming

Earlier this year, T-Mobile finally completed most of its long-sought Sprint merger to become the second-largest carrier. That brought it a trove of high-band 5G spectrum but also a lot of work to integrate it into its own systems. It’s also still in mid-deal with Dish, which when consummated will give it access to the latter’s portfolio of 600-Mhz bandwidth, while unloading pre-paid provider Boost Mobile. T-Mobile also just signed a spectrum lease with Columbia Capital for another swathe of 600-Mhz spectrum.

Walter Piecyk, an analyst for LightShed Partners, calls the lower-frequency bandwidth a “bridge” to T-Mobile’s even faster 5G future, allowing it to moderately speed up its network now while it cleans up that Sprint 2.5-Ghz high-band. 

“It will take a few years to clean up and deploy the more dramatic 5G capabilities that 2.5 GHz spectrum enables,” Pieczyk wrote. By then, T-Mobile could be the speed leader among the big carriers. 

In the meantime, T-Mobile and its competitors are doing what they can to roll out fast, widely available 5G networks now, before the iPhone 5G arrives.

Softbank Group said it is exploring options to monetize its stake in U.S. wireless carrier T-Mobile, a move that could raise as much as $20 billion and is part of a larger plan to sell off assets.

Softbank said Tuesday that it is exploring its options with the T-Mobile stake, which it acquired after it merged its U.S.-based wireless company Sprint with T-Mobile in April. According to reports, Softbank could sell as much as $20 billion of its T-Mobile stock, or about 200 million shares, as part of a larger effort to monetize about $40 billion in assets.

Softbank acquired its Sprint stake in 2013, but the wireless company never lived up to its expectations and sold the wireless carrier to T-Mobile in April in a deal valued at $26 billion. 

Softbank has struggled of late, mainly because of bad investments made by its Vision Fund, the $100 billion venture capital arm formed by Softbank founder, chairman and CEO Masayoshi Son in 2017 to invest in leading edge technologies. Big bets on tech companies like Uber and WeWorks fizzled -- it reduced the value of its WeWork stake from $47 billion to just $2.9 billion and its Uber interest lost about $10 billion in value -- leading to an $18 billion loss for the VC arm last year.

In a Securities and Exchange Commission filing, T-Mobile said Softbank is considering several options to monetize its investment, including a private placement offering, private negotiations with T-Mobile, Deutsche Telekom or third parties, derivative or hedging transactions, margin loans or other structured transactions.

Deutsche Telekom has been speculated as a possible buyer of Softbank’s T-Mobile shares, and though it would need to sign off on some transactions, has not commented on its intentions.

T-Mobile stock, down as much as 4% in early trading Tuesday, was priced at $103.03 each (down 1.6%) by the early afternoon. 

Dish shares were up by as much as 5% on Monday after reports that the satellite giant was in talks with T-Mobile USA to extract more favorable terms in its pending purchase of the cell phone company’s Boost Mobile prepaid wireless business.

Dish stock was priced as high as $34.55 each on Monday, up 5% or $1.66 each. The stock closed at $34.04 (up $1.34, or 4.1%) on June 15.

Dish agreed to purchase T-Mobile’s Boost Mobile business earlier this year, part of the concessions the wireless carrier made in obtaining federal regulatory approval of its $26 billion purchase of Sprint. Dish had agreed to purchase Boost for $1.4 billion, and also pledged to purchase 800-Megahertz wireless spectrum from T-Mobile for $3.6 billion over three years. Dish also agreed to a mobile virtual network operator (MVNO) agreement with T-Mobile that would give it access to the larger company’s mobile network over seven years.

Related: Wireless Customers Sprint to T-Mobile

The Boost deal is scheduled to close on July 1, but several reports citing unnamed sources familiar with the transaction have claimed that Dish is attempting to get the prepaid service at a lower price, given the COVID-19 pandemic. Fox Business reporter Charlie Gasparino tweeted about potential problems with the deal last week, saying T-Mobile was looking at its options, including finding another buyer for the prepaid service.

[embed]https://twitter.com/CGasparino/status/1270800851028885505[/embed]

While some analysts have said Dish has leverage in the negotiations because T-Mobile needs the deal to close its larger Sprint transaction, others have said the onus is on Dish and its chairman Charlie Ergen.

Dish Network declined comment.

In a blog post Monday, MoffettNathanson principal and senior analyst Craig Moffett noted that Dish needed the Boost deal to help it realize its own wireless service. Dish has been buying up wireless spectrum for years, and faced a 2020 deadline to have a wireless network up and running and available to 70% of the country or have its licenses revoked by the federal government. The Boost deal gave Dish a reprieve -- it now has to build that network by June 2023 -- and Moffett sees little wiggle room for Dish.

“The value of the prepaid business might be debatable. The value of the MVNO agreement and the license extensions is not,” Moffett wrote. “It may be Dish Network’s style to always argue over every dollar. But that impulse seems largely self-defeating in this case.”

LightShed Partners principal and telecom analyst Walt Piecyk wrote in a blog posting that he expects the Boost deal to close on July 1. 

“Charlie Ergen has not given any indication to investors, equipment vendors, software vendors, tower companies or just about anyone, for that matter, that he would like to walk away from the MVNO agreement or the Boost deal,” Piecyk wrote. “In addition, and as we wrote last week, we believe the Covid Pandemic or any other ‘force majeure’ is not sufficient to change or break the Boost deal based on our reading of the terms of the agreement. We aren’t lawyers, but it seems pretty straight forward if you actually read it.” 

The FCC is satisfied that the MVNO (mobile virtual network operator) agreement the combined T-Mobile/Sprint has created for Boost Mobile passes muster.

One of the major conditions of the merger was that the Boost Mobile prepaid wireless business be spun off to Dish, which would eventually be turned into a facilities-based carrier to compete with T-Mobile and AT&T and Verizon, but in the interim would need to use T-Mobile's facilities (the "virtual" in MVNO).

Related: Analyst Says Merger Could Create Problems for Dish

In a letter to T-Mobile, the FCC's co-leads on the merger said they were convinced that the agreement was consistent with the FCC's goals in requiring the spin-off, which were "(1) Wholesale Network Pricing; (2) Discrimination and Competitive Constraints; (3) Long-Term Competition and Facilities Deployment; and (4) a Stable Transition of New Boost’s Operations."

Related: Pai Recommends T-Mobile/Sprint Merger

They said that the pricing would allow New Boost to make decisions "similar to a facilities-based carrier" and would allow them to be aggressive competitors and was a better deal than any other MVNO had with T-Mobile or, previously, with Sprint. Dish will get terms at least as favorable as T-Mobile's Metro PCS prepaid business.

Dish can also use its own spectrum so the MVNO can be an on-ramp to its own facilities-based 5G network.

"After a careful review of the submitted materials, we find that your MVNO agreement with DISH is consistent with these principles," said Charles Mathias and Catherine Matraves, co-directors of the T-Mobile/Sprint Task Force, in a letter to the company. 

Will the “New T-Mobile” soon offer its unlimited wireless data plan subscribers free access to Netflix, Quibi and Hulu?

Last week, T-Mobile announced that in addition to getting the base version of Netflix for free, subscribers to its Magenta and other family-targeted unlimited data plans will also have free access to mobile-first streaming service Quibi, which launched Monday. T-Mobile calls the promo “Quibi on Us,” much like the “Netflix on Us”-branded promotion it's had in place since 2017.

Related: T-Mobile Offering Free Quibi Service to Customers

Last week, however, T-Mobile also closed on its $31 million acquisition of No. 4 U.S. wireless operator Sprint. That carrier has an existing deal, established in 2017 when Hulu was still a joint venture between Comcast, Disney, a pre-Disney-owned Fox and the erstwhile Time Warner Inc., to provide its unlimited wireless customers with free base-level, $5.99-a-month Hulu service.

Will there come a day when subscribers to the combined company, dubbed New T-Mobile, have free streaming access to all three OTT smorgasbords?

In an email response to Next TV this morning, a T-Mobile rep put it this way: “For now, Sprint and T-Mobile customers will continue to receive the same benefits they currently have, and we’re working on exciting new benefits in the future. Stay tuned!

In its buttressed position against Nos. 1 and 2 carriers Verizon and AT&T, offering Netflix, Quibi and Hulu would be a sizable value proposition for New T-Mobile.

Verizon has recently upped its strength by adding a year’s free access to Disney Plus. AT&T will soon provide HBO Max to unlimited wireless customers who also subscribe to HBO through AT&T’s pay TV services, or through direct-to-consumer means. 

Will the “New T-Mobile” soon offer its unlimited wireless data plan subscribers free access to Netflix, Quibi and Hulu?

Last week, T-Mobile announced that in addition to getting the base version of Netflix for free, subscribers to its Magenta and other family-targeted unlimited data plans will also have free access to mobile-first streaming service Quibi, which launched Monday. T-Mobile calls the promo “Quibi on Us,” much like the “Netflix on Us”-branded promotion it's had in place since 2017.

Also Read: T-Mobile Offering Free Quibi Service to Customers

Last week, however, T-Mobile also closed on its $31 million acquisition of No. 4 U.S. wireless operator Sprint. That carrier has an existing deal, established in 2017 when Hulu was still a joint venture between Comcast, Disney, a pre-Disney-owned Fox and the erstwhile Time Warner Inc., to provide its unlimited wireless customers with free base-level, $5.99-a-month Hulu service.

Will there come a day when subscribers to the combined company, dubbed New T-Mobile, have free streaming access to all three OTT smorgasbords?

In an email response to Next TV this morning, a T-Mobile rep put it this way: “For now, Sprint and T-Mobile customers will continue to receive the same benefits they currently have, and we’re working on exciting new benefits in the future. Stay tuned!

In its buttressed position against Nos. 1 and 2 carriers Verizon and AT&T, offering Netflix, Quibi and Hulu would be a sizable value proposition for New T-Mobile.

Verizon has recently upped its strength by adding a year’s free access to Disney Plus. AT&T will soon provide HBO Max to unlimited wireless customers who also subscribe to HBO through AT&T’s pay TV services, or through direct-to-consumer means. 

A federal district judge in Washington Wednesday (April 1) ruled that the Department of Justice's settlement of its challenge to the T-Mobile-Sprint merger was in the public interest, paving the way for the closing of the deal. 

Justice and a number of states--Arkansas, Colorado, Florida, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Dakota, and Texas--had agreed to the settlement with the companies and Dish. 

Related: Sprint/T-Mobile Merger Will Go Forward 

Part of the settlement was that the combined company had to spin off its prepaid businesses, including Boost Mobile, Virgin Mobile, and Sprint prepaid brands, to Dish, as well as spectrum assets. 

The idea was to seed Dish as a new, eventually facilities-based, wireless competitor given that the deal was reducing the Big Four--AT&T, Verizon, Sprint and T-Mobile--to the Big Three. 

"I am pleased that the court has entered the final judgment, and I appreciate all of the work from Judge Kelly and the district court staff, particularly in the midst of the current COVID-19 disruption,” said Assistant Attorney General Makan Delrahim, who heads DOJ's Antitrust Division. “The T-Mobile-Sprint transaction, as remedied by the Department of Justice, will combine T-Mobile’s and Sprint’s complementary spectrum assets while preserving competition. Our settlement promises to expand output further by bringing Dish’s extensive spectrum holdings to the market. The end result will be strengthened competition with high-quality 5G networks that will benefit American consumers nationwide.” 

A New York Southern District Judge had denied a request by another group of states, led by New York and California, to block the deal, in part because of the DOJ deal remedies. The FCC also approved the deal.

T-Mobile and Sprint have officially closed a merger of the Nos. 3 and 4 wireless carriers in the U.S., a deal valued at $31 billion.

As per earlier announced parts of the agreement, longtime T-Mobile CEO John Legere will step down, departing the company in March. Mike Sievert, who previously served as chief operating officer under Legre, will lead the combined company. 

Also, as per agreement with regulators, T-Mobile and Sprint will sell wireless assets valued at $5 billion to Dish Network. These assets include T-Mobile’s wireless prepaid business, which include the Virgin Mobile and Boost Mobile brands, and will ostensibly replace the lost competitive balance in the U.S. wireless market by enabling the formation of a fourth carrier. 

Since first announcing the merger back in June 2018, Legere and T-Mobile have touted the synergies as they relate to buildout of next-generation 5G networks. With Sprint’s assets in hand, T-Mobile has promised to spend $40 billion to reach 99% of the U.S. population with 5G service within six years. It has also pledged to reach 90% of rural areas with 50 Mbps broadband. 

This network buildout will include fixed 5G home services, which will compete head-on with the dominant home internet service businesses of Comcast, Charter Communications and other cable companies. 

T-Mobile is similar to Verizon, in that it doesn’t own major video content assets, similar to AT&T’s WarnerMedia position. 

However, expect TV to be a major part of the so-called “New T-Mobile’s” evolution in the coming months and years, with the company already parlaying its $325 million purchase of Layer3 TV in January 2018 into the pay TV service branded as TVision. 

TVision, which offers a base tier of 154 channels, a choice of Amazon Alexa or Google Assistant voice support, and 400 hours of cloud DVR storage has flown under the radar to date, has flown under the radar, and remains underplayed on a national basis. Scale has been an issue, with programming costs coming in at 20%-30% higher than more established pay TV services, according to federal filings. 

However, with T-Mobile expanding its reach, TVision will likely soon become a more ubiquitous presence in the U.S. video market. 

After a nearly two-year slog through the federal approval process and a brief scuffle with a handful of states' attorneys general, T-Mobile dragged its $26 billion merger with Sprint Corp., across the finish line Wednesday, creating what it hopes to be a much stronger No. 3 wireless carrier.

T-Mobile first announced its intention to merge with Sprint on April 29, 2018, confirming what had been at the time one of the worst kept secrets in the telecom business.  The merger faced some backlash from consumer groups objecting to the removal of a viable wireless competitor (Sprint), but the company managed to pass federal regulatory muster by agreeing to conditions to sell its prepaid wireless business and a chunk of spectrum to Dish Network.  Last year, a handful of states’ attorneys general -- including AGs in New York and California -- sued to block the deal, but a federal court ruled in favor of the telecom companies in February. 

With the closing of the merger, the New T-Mobile will be led by former T-Mobile chief operating officer Mike Sievert. Sievert had been expected to assume the CEO role from John Legere on May 1, but the company said it decided to accelerate the transition.

“I’ve been fortunate enough to lead this company for the past seven years, but now it’s time for me to hand the reins over to Mike Sievert,” Legere said in the press release. “The Board of Directors and I agree that it makes perfect sense for Mike to assume his leadership role on day one of the new company. He’s ready!”

The new T-Mobile has committed to spend about $40 billion over three years on 5G deployment and to expand its rural wireless service to reach 59.4 million homes. It has also promised to deploy a new in-home broadband option to more than 52% of U.S. ZIP codes, with a plan to obtain 9.5 million U.S. households by 2024, with 20% of those homes in underserved areas. The new T-Mobile also expects to build 600 additional retail outlets.

“WIth this powerful network, the New T-Mobile will deliver real choice and value to wireless and home broadband customers and double down on all the things customers have always loved about the Un-carrier,” Sievert said in a press release. “T-Mobile has been changing wireless for good — and now we are going to do it on a whole new level!”

T-Mobile stock was up about 2% ($1.9 each) to $85.81 per share in early trading April 1. 

T-Mobile said it is “financially prepared” to complete its $26 billion merger with Sprint, despite the effect the coronavirus outbreak has had on financial markets.

T-Mobile said in a press release that it has previously secured commitment for bridge financing and senior secured credit financing for the all-stock deal. The company said it has been in communication with all 16 banks involved in the deal and has not received any word that they are unable to meet their commitments.

“I’m pleased that right now we have broad support from the banks to finance the closing of this merger -- we are very close to unleashing the capabilities of the New T-Mobile, and that is even more important for consumers during the current COVID-19 pandemic,” T-Mobile CEO John Legere said in a press release. “Our nation is more dependent than ever on connectivity, and we will continue to deliver our essential wireless service today and when we merge with Sprint, with a Nationwide 5G service that is broader and more robust than anything else in America.We can see the finish line and are prepared to close the merger very soon so our teams can get to work building a supercharged Un-carrier.”

Related: T-Mobile Outlines Coronavirus Related Service Changes 

T-Mobile and Sprint stocks have taken a hit along with the rest of the market as the coronavirus pandemic has ripped through financial markets over the past few weeks. The Dow Jones Industrial Average has lost about 10,000 points in the past five weeks as investors are uncertain what effect long-term social distancing can have on business. For T-Mobile and Sprint, the stocks are down about 22% and 13% respectively since Feb. 13, but analysts are generally optimistic that the deal will not only go through, but that the combined entity will be a stronger competitor.

Related: T-Mobile-Sprint Agree to Give Deutsche Telekom Bigger Stake 

For example, in a note to clients Sanford Bernstein analyst Peter Supino addressed concerns of some investors that fear Sprint’s higher customer churn would have a negative effect on the merger. In that note, Supino said that while the integration isn’t expected to be easy, he believes that most of Sprint’s customer churn is from those who switch to T-Mobile.

“Subscribers who would leave Sprint to go to T-Mobile and vice-versa will no longer have that option,” Supino wrote. “We believe the combined company can save $2 billion on lower sales commissions and handset subsidies. If we are correct and New T-Mobile begins to report lower churn, we think the stock's valuation multiple will expand in anticipation of improving cash flow.”

Legere is still scheduled to step down as CEO shortly after the merger closes, replaced by current T-Mobile chief operating officer Mike Sievert. In the press release, Sievert said the current coronavirus uncertainty means the industry needs the combination more than ever.

“In times when consumers need affordable service plans to stay connected, T-Mobile is fully prepared and well positioned to be the provider to meet these needs,” Sievert said in the release. “In fact, after we close the merger, the New T-Mobile may be the best positioned company to serve them, as more and more consumers seek value in these uncertain times. We are here for our community of consumers who count on us.”

FCC chair Ajit Pai Friday confirmed that the FCC commissioners have now voted to propose fining AT&T, Verizon, Sprint and T-Mobile over $200 million collectively for "apparently selling access to their customers’ location information without taking reasonable measures to protect against unauthorized access to that information." 

The vote was 4 to 1, with Commissioner Jessica Rosenworcel dissenting and Commissioner Geoffrey Starks dissenting in part.

Pai said T-Mobile drew the biggest fine at more than $91 million, with AT&T next at $57 million, Verizon at $48 million and over $12 million for Sprint. 

The commission also admonished all four, which would be a permanent black mark in their record.

Pai said the items would be released later Friday and called it decisive action to protect American consumers. 

The FCC has been investigating carriers' alleged selling/sharing of geographic location information with third party data aggregators, information that reportedly made its way to bounty hunters and others, data their subs can't opt out of because it is used to provide the underlying service.

The Enforcement Bureau said it launched the investigation "following public reports that a Missouri Sheriff, Cory Hutcheson, used a 'location-finding service' operated by Securus, a provider of communications services to correctional facilities, to access the location information of the wireless carriers’ customers without their consent between 2014 and 2017." 

Pai signaled last month he would be circulating one or more NALS for Forfeiture (essentially a fine) related to its finding. 

“This FCC will not tolerate phone companies putting Americans’ privacy at risk," the chairman said in a release issued only minutes after he spoke about the fines at a post-public meeting press conference. 

In a release the FCC outlined the relevant law and rules and the results of its investigation. 

"The Communications Act requires telecommunications carriers to protect the confidentiality of certain customer data related to the provision of telecommunications service, including location information. The FCC’s rules make clear that carriers must take reasonable measures to discover and protect against attempts to gain unauthorized access to this data. The rules also require that carriers or those acting on their behalf generally must obtain affirmative, express consent from a customer before using, disclosing, or allowing access to this data. And carriers are liable for the actions of those acting on their behalf. 

"All four carriers mentioned above sold access to their customers’ location information to “aggregators,” who then resold access to such information to third-party location-based service providers (like Securus). Although their exact practices varied, each carrier relied heavily on contract-based assurances that the location-based services providers (acting on the carriers’ behalf) would obtain consent from the wireless carrier’s customer before accessing that customer’s location information.  

"Hutcheson’s unauthorized access of hundreds of wireless customers’ location information made clear that the carriers’ existing measures to safeguard this data were inadequate. Yet all four carriers apparently continued to sell access to their customers’ location information without putting in place reasonable safeguards to ensure that the dozens of location-based services providers acting on their behalf were actually obtaining consumer consent. Although the carriers had several commonsense options to impose reasonable safeguards (such as verifying consent directly with customers via text message or app), the carriers apparently failed to take the reasonable steps needed to protect customers from unreasonable risk of unauthorized disclosure. The size of the proposed fines for the four wireless carriers differs based on the length of time each carrier apparently continued to sell access to its customer location information without reasonable safeguards and the number of entities to which each carrier continued to sell such access.  

"The proposed actions, formally called Notices of Apparent Liability for Forfeiture and Admonishment, or NALs, contain allegations that advise the parties on how they have apparently violated the law and set forth a proposed monetary penalty. Neither the allegations nor the proposed sanctions in the NALs are final Commission actions. The parties will be given an opportunity to respond and the Commission will consider the parties’ evidence and legal arguments before taking further action to resolve these matters. The Commission may not impose a greater monetary penalty in its final resolution of whether the parties have violated the law than the amount proposed in the NAL."  

Democratic Commissioner Jessica Rosenworcel, who had pushed for the investigation, was underwhelmed with the result and could not support it. 

“The FCC’s investigation is a day late and a dollar short," she said. "The FCC kept consumers in the dark for nearly two years after we learned that wireless carriers were selling our location information to shady middlemen. There are more than 270 million smartphones in service in the United States and this practice put everyone using them at a safety risk. The agency proposes a $40,000 fine for the violation of our rules—but only on the first day. For every day after that, it reduces to $2,500 per violation. The FCC heavily discounts the fines the carriers potentially owe under the law and disregards the scope of the problem. On top of that, the agency gives each carrier a thirty-day pass from this calculation. This thirty day “get-out-of-jail-free” card is plucked from thin air."

Democratic Commissioner Geoffrey Starks' dissent in part still counts as a "yes" vote, but with major caveats. 

"I am pleased that the Notices of Apparent Liability we vote[d] on today confirm that misuse of customer location data by AT&T, Verizon, Sprint, and T-Mobile violate the Commission’s rules," he wrote in a statement. "These serious violations damaged Americans’ faith in our telephone system, and I am pleased that we have reached bipartisan agreement that enforcement is appropriate here. I cannot fully approve these Notices, however, because in conducting these investigations and determining the appropriate penalty, we lost track of the most important part of our case—the very consumers we are charged with protecting. Because I strongly believe we should have determined the number of customers impacted by the abuses and based our forfeiture calculations on that data—calculations that would have been possible if we had investigated more aggressively—I must dissent in all remaining parts of the item.

One prominent senator was on the same page as Rosenworcel.

“The Trump FCC wants you to think it’s protecting your privacy – don’t be fooled,” said Senator Ed Markey (D-Mass.), who had pushed for an investigation. “For almost two years, the FCC has known that companies were selling real-time location information that could reveal where you live and work. This compromise of our trust and personal information isn’t just a creepy, abstract privacy risk, it is a direct threat to consumers’ physical safety and well-being. Instead of meetings its obligation to come down hard on the wireless carriers that are guilty in this case, the FCC dragged its feet and issued penalties that let these companies off easy. If you own a smart phone, information about where you were at any given moment may have been bought and sold. You deserve better than this decision from the FCC.”

It was at the prodding of House Energy & Commerce Committee Chairman Frank Pallone (D-N.J.) at an FCC oversight hearing that prompted Chairman Ajit Pai to signal fines were coming. The congressman was glad the fines were being proposed, he was not happy with the amounts.

“Today’s notice by the FCC confirms what I have said from the beginning — carriers have a duty to protect consumers’ real-time location data and the FCC must enforce the law in order to protect the personal safety of consumers across the country," he said. "While I am glad the FCC is finally proposing fines for this egregious behavior, it represents little more than the cost of doing business for these carriers. Further, the Commission is still a long way from collecting these fines and holding the companies fully accountable. I will continue to closely monitor this important issue.”

The FCC is preparing to fine all the major wireless carriers--AT&T, Verizon, Sprint, and T-Mobile--hundreds of millions of dollars for sharing customer location data without their permission, according to The Wall Street Journal.

A source familiar with the notices of apparent liability (NALs) said at press time they had been circulated but not all commissioners had voted them. They were expected to be announced Friday (Feb. 28), although they were not on the agenda for the FCC's public meeting, where enforcement actions are often voted at the end of the proceedings.

A spokesperson for FCC Chairman Ajit Pai said the commission does not comment on enforcement actions until they are adopted and announced, but FCC Chairman Ajit Pai had already revealed last month that one or more of those carriers would be the target of an enforcement action following an investigation by the FCC's Enforcement Bureau, which determined that one, "or more," of the carriers it was investigating for disclosing real-time location data broke the law.

At that time, CTIA: The Wireless Association said: “Wireless companies are committed to protecting the privacy of consumers and share location data only with customer consent. Upon hearing allegations of misuse of the data, carriers quickly investigated, suspended access to the data and subsequently terminated those programs.”

Related: Carriers Say They Have Cut Ties With Location Data Aggregators

The FCC has been investigating carriers' alleged selling/sharing of geographic location information with third party data aggregators, information that reportedly made its way to bounty hunters and others, data their subs can't opt out of because it is used to provide the underlying service.

Pai signaled he would be circulating one or more NALS for Forfeiture (essentially a fine) related to its finding.

The Open Technology Institute, reacting to the news, pointed out that it had joined with Free Press and the Center on Privacy & Technology at Georgetown Law filed a complaint with the FCC calling for the investigation into the issue of carriers disclosing location data. 

“While the FCC’s action is welcome, it is long overdue," said OTI policy director Sharon Bradford Franklin. "Consumers trust wireless providers to collect their location information for the sole purpose of providing the wireless communications services we all rely on every day. This location information is so sensitive and revealing of the patterns of everyday life that the Supreme Court has required law enforcement to get a warrant before collecting this data. Meanwhile, wireless carriers sold this sensitive information without the consent of their customers, in direct violation of the Communications Act and the FCC’s rules."

Sprint and T-Mobile, nearing the finish line in their $26 billion merger, have agreed to give T-Mobile parent Deutsche Telekom a larger stake in the combined company.

T-Mobile-Sprint amended their business combination agreement Thursday, with Sprint parent Softbank Group agreeing to free up about 48.8 million shares of Sprint stock to the combined company, New T-Mobile, after the deal is closed. The agreement will have no effect on other shareholders of both companies -- they will still exchange 9.75 Sprint shares for every T-Mobile share.

Softbank, which controls about 80% of Sprint stock, will now exchange 11.3 Sprint shares for every T-Mobile share. Once the deal is closed, expected on April 1, Softbank will own 24% of the newly combined company, with Deutsche Telekom owning 43%. The remaining 33% of the company will be held by public shareholders.

The completion of the merger will end what has been a two-year ordeal for both companies. Earlier this month a federal court cleared the path for the deal, thwarting attempts by several states attorneys general to block the deal. Later, New York State Attorney General Letitia James, one of the staunchest opponents of the deal, said she would not appeal the federal ruling.  However, the deal still can’t close unless California Attorney General Xavier Becerra agrees not to appeal.

According to several reports, Sprint decided to give Deutsche Telekom a larger stake to make up for deteriorating financials at the company as the approval process has dragged on. 

New York State, which took the lead in the state attorneys general suit trying to block the T-Mobile-Sprint merger, has decided not to appeal the court decision upholding the deal, saying it will instead work to make sure it is the best merger it can be. 

A U.S. District Court Judge for the Southern District of New York concluded the deal was in the public interest. 

Related: T-Mobile-Sprint Decision Draws Crowd 

That is according to New York attorney general Letitia James. 

"After a thorough analysis, New York has decided not to move forward with an appeal in this case. Instead, we hope to work with all the parties to ensure that consumers get the best pricing and service possible, that networks are built out throughout our state, and that good-paying jobs are created here in New York," she said in a statement. "We are gratified that this process has yielded commitments from T-Mobile to create jobs in Rochester and engage in robust national diversity initiatives that will connect our communities with good jobs and technology. We are committed to continuing to fight for affordability and access for all of New York’s mobile customers.” 

T-Mobile and Sprint have said the deal would be a net gain for jobs, boost the competition to AT&T and Verizon and speed the rollout of next-gen wireless. 

With the $26 billion T-Mobile-Sprint merger on a path toward an April close, Dish Network is on the cusp of becoming the country’s fourth largest wireless carrier, a result of merger conditions agreed to last year that at least one analyst argues could pose problems for the satellite carrier.

Last year, as part of the conditions of federal approval of its merger with T-Mobile, Sprint agreed to sell its U.S. prepaid wireless businesses (Boost Mobile and Virgin Mobile) to Dish for $1.4 billion. In addition, Dish agreed to purchase 800 Megahertz spectrum from T-Mobile-Sprint for $3.6 billion over three years.

Dish has said it believes it could build a 5G network for about $10 billion, a figure some analysts have scoffed at as too low. 

Related: T-Mobile-Sprint Merger Gains Approval

On the surface, that deal seemed to solve most of Dish’s wireless problems -- which were mainly having to meet a March 2023 buildout deadline for its own wireless spectrum mandated by the federal government. In addition, Boost Mobile and Virgin Mobile give Dish access to 9.3 million customers in 50 states and Puerto Rico. It also gets an extension on its wireless buildout requirements and has committed to using those licenses to deploy a 5G network covering at least 70% of the country by June 14, 2025. If it fails to meet the deadline, Dish said it will make voluntary contributions to the U.S. Treasury of up to $2.2 billion.

In a blog post, MoffettNathanson principal and senior analyst Craig Moffett wrote that while the T-Mobile-Sprint merger gives Dish a much-needed buildout reprieve, it may be coming at too high a price.

According to Moffett, getting the extension means that Dish has lost the ability to sell its spectrum or the company itself, at least to AT&T or Verizon, because of that spectrum sale prohibition.

“There is simply no wiggle room left for Dish to be viewed as a spectrum seller,” Moffett wrote.

But judging by the market reaction, investors appear relieved that the deal is finally on a path toward completion.

Sprint stock was up by more than 70% in early trading Feb. 11 to $8.35 per share. T-Mobile shares rose 11% and Dish was up by about 10% early in the day.

Moffett concedes that the deal benefits Sprint the most, adding that without a merger, “they were officially ****’ed.”

Barclays media analyst Kannan Venkateshwar wrote that the T-Mobile-Spring union will be a massive positive for Dish, giving it access to a ready-made wireless customer base, the ability to buy spectrum and getting a lengthy extension on its buildout.

“Overall, we believe Dish got almost everything it could have dreamed of as a best case scenario,” Venkateshwar wrote. However, he did have one caveat: “..[E]xecution risk is non-trivial as is evident from multiple such new entrant buildouts in other parts of the world.”

There’s the rub. Dish may have some more time to build out its network, but it still has to build it. While Dish has said in the past that it would hope to find a partner to do that, it isn’t so clear anymore as to whether the company wants a partner or can get one. And even after 2025, when it has presumably built out to 70% of the country, they may not be finished yet.

Moffett wrote that Dish will have an MVNO to lease wireless service from the New T-Mobile, but that deal expires in seven years. There is no guarantee that it will be able to renew.

“On the day the deal expires, then, they obviously can’t just cover 75% of the country, regardless of what their buildout requirements demand,” Moffett wrote. “They will need to have fully competitive national coverage. Dish will, however, have the flexibility to cover the remaining 25% predominantly with low-band spectrum.”

Moffett was also cautious of the 9.3 million prepaid wireless customers Dish will inherit, adding that that segment churns at a rate of about 5% per month.

“So Dish will have to aggressively refill the funnel with new subscribers by significantly accelerating subscriber intake,” Moffett wrote. “And to do so they will have to leverage a retail distribution network that is already too small and too ineffective to keep Sprint’s prepaid business from shrinking.”

That is going to require a lot of capital, which Moffett said a partner -- some have speculated Google or Amazon would be interested -- could help finance. But the analyst wondered why Google, Amazon or any other deep-pocketed partner would place that heavy a bet on a new wireless network that has yet to be built, and place it at terms that would be attractive to Dish. 

"Whether all that is good news or bad news for Dish is in the eye of the beholder," Moffett wrote. "There are clearly those who believe Dish will be able to build a virtualized 5G network for their $10 billion, as they have estimated. We are not among them."

A district court judge's decision upholding the Justice Department and FCC approval of the Sprint-T-Mobile merger drew immediate reaction from Washington.  

Both the FCC and Justice had argued the deal would help speed the 5G rollout, with conditions that would ultimately create a new, facilities-based, competitor, helping justify the reduction of the Big Four--AT&T, Verizon, T-Mobile and Sprint--wireless carriers to the Big Three. 

Delrahim Derides State Efforts to Derail T-Mobile-Sprint Merger 

“I’m pleased with the district court’s decision," said FCC chair Ajit Pai. "The T-Mobile-Sprint merger will help close the digital divide and secure United States leadership in 5G. After the merger, T-Mobile has committed to bringing 5G to 97% of our nation’s population within three years and 99% of Americans within six years. Its 5G network will also reach deep into rural areas, with 85% of rural Americans covered within three years and 90% covered within six years. This transaction represents a unique opportunity to speed up the deployment of 5G throughout the United States, put critical mid-band spectrum to more productive use, and bring much faster mobile broadband to rural Americans." 

“The New York District Court rightfully came to the same conclusion in considering the T-Mobile and Sprint merger as I did during my review, and I am pleased that the deeply flawed case made by the state Attorneys General was rejected," said Republican FCC Commissioner Michael O'Rielly. "It is time to wrap up the entire process and allow these parties to merge. Once completed, a new T-Mobile will have certain commitments to meet, but I am excited to see it return to its mavericky style, quickly deploying 5G networks and intensely competing in the wireless marketplace, ultimately bearing out our expectation that it will provide consumers with new innovative offerings and a creative choice of packages.”

More than a dozen states had sued to block the deal, saying it would raise prices and reduce competition. 

“I am pleased and agree with Judge Marrero’s decision to deny the injunction, and particularly his conclusion that the department’s divestiture and remedy package resolves the competitive concerns in this case,” said Assistant Attorney General Makan Delrahim , head of the DOJ's Antitrust Division. “This opinion is an important next step toward strengthening competition for high-quality 5G networks that will benefit American consumers nationwide.”

“This is good news for U.S. consumers who benefit from economies of scale and free markets picking winners and losers, not bureaucrats or politicians," said Jessica Melugin, associate director of the Competitive Enterprise Institute's Center for Technology and Innovation. "This merger isn’t about taking the number of wireless providers from four to three, it’s about letting the third and fourth biggest players combine in order to be a third provider of 5G, alongside Verizon and AT&T.” 

"While the expert career staff at the Federal Communications Commission and Department of Justice have already determined this transaction is in the public interest and will promote competition, I look forward to seeing the New T-Mobile continue to deliver on its commitments to serve rural America and inject further competition into the fast-changing wireless marketplace," said House Energy & Commerce Committee ranking member Greg Walden (R-Ore.).

“I’m pleased that Judge Marrero has denied the attempt of a minority of states to second-guess the considered decisions of the Department of Justice and the FCC to allow the T-Mobile/Sprint merger to be consummated," said Free State Foundation President Randolph May. "In comments before the FCC and before the the District Court, I explained that, all things considered, the merger was likely to increase competition and overall consumer welfare not only in today’s wireless marketplace but in the broader telecommunications marketplace as well."

“While NATE as an organization did not take a formal position on the proposed T-Mobile/Sprint merger, the news this week of a favorable merger ruling provides much needed clarity in the industry," said National Association of Tower Erectors Executive Director Todd SchleKeway. "We are particularly pleased that this decision came prior to our annual NATE UNITE 2020 Conference as this merger will be a major topic of conversation at our event. NATE and our 930 member companies are optimistic that this T-Mobile/Sprint merger news will ultimately lead to increased carrier and vendor spending investments that are necessary in order to build, install and maintain the next generation networks and related infrastructure that are so critical to the 5G deployment cycle in the United States."

But not everyone was cheering, including the losing parties, the public interest groups and unions that had fought the deal, and Democratic regulators who had opposed it.

New York Attorney General Letitia James, whose state was one of the leads in the suit, was not pleased.

“Today’s decision marks a loss for every American who relies on their cell phone for work, to care for a family member, and to communicate with friends," she said. "We disagree with this decision wholeheartedly, and will continue to fight the kind of consumer-harming megamergers our antitrust laws were designed to prevent." 

That could include appealing the decision to a higher court.  

"As we review our options, including a possible appeal, Americans should continue to hold the companies to account for their promises," she said. 

“The merger between T-Mobile and Sprint will dramatically alter America’s wireless landscape," said Democratic FCC Commissioner Geoffrey Starks, who voted against the merger. "The state Attorneys General presented a strong case. The court saw it differently. In particular, given how central DISH’s future role as a wireless competitor was to the court’s decision, I remain disappointed that those facts were not fully vetted in the merger that I voted on. Nevertheless, the merging parties have made significant promises – to lower prices, to deploy 5G throughout the country, and to increase the diversity of their suppliers, employees and executives. Moreover, DISH has promised to build a 5G network from scratch in a few short years. I look forward to seeing how these companies will fulfill their promises to the American people.” 

“This is disappointing," said Commissioner Jessica Rosenworcel, the other "no" vote in the FCC's 3-2 approval of the deal. "I am concerned that antitrust enforcement is not working for consumers. Going forward it is absolutely essential that the FCC enforce the promises made by these companies in their effort to secure approval from this agency. Any other outcome would be unacceptable—because in our 5G future we cannot afford to leave anyone behind.”

"We are profoundly disappointed that the judge approved a merger that will harm communities of color and low-income communities across California," said Greenlining Institute Technology equity director Paul Goodman. "T-Mobile's tepid promises to offer low-cost services were contradicted by T-Mobile's own experts, and T-Mobile's commitments are too vague and full of loopholes to ensure that the merger is in the public interest. The Greenlining Institute will continue to fight the merger at the California Public Utilities Commission to ensure that communities of color have access to affordable, high quality service." 

“How many times will judges and antitrust enforcers be fooled by the empty promises these companies make to get these deals approved?" said Free Press VP of policy and general counsel Matt Wood. "Using an unhealthy mix of hubris, bad judgment, and petty politics, the FCC’s Republican majority and Donald Trump’s attorney general for antitrust decided to wave this deal through — reportedly ignoring the advice of staff at both agencies who had called to reject it. More than a dozen state AGs rightly stepped in to fill the void, making the obvious case that the competition between Sprint and T-Mobile benefits all wireless users and especially those who seek out lower-priced plans and greater value." 

“Today's decision is a tremendous loss for consumers, the American economy, and antitrust law itself," said Joshua Stager, senior counsel at New America's Open Technology Institute. "This merger was plainly illegal from the moment it was announced, which is why the Trump Administration twisted itself into knots devising one of the most convoluted antitrust remedies in living memory.

“Markets don’t recover from mergers like this one—they turn into oligopolies marked by high prices, collusion, and inequality," Stager said. "Unfortunately, the court fundamentally misunderstood how the wireless market operates, and consumers will quite literally pay the price for its misguided ruling." 

“Throughout this process, regulators who are supposed to be protecting the public interest have ignored clear evidence that this merger would result in significant job loss for wireless workers,” said Communications Workers of America President Chris Shelton in a statement. “We are grateful to the attorneys general who stepped in to try to protect workers and customers after President Trump’s appointees at the FCC and Department of Justice ignored their concerns. This decision does not mean that we will stop fighting to protect jobs and raise standards for workers across the industry.

“We are deeply disappointed in the Court’s decision to approve the T-Mobile-Sprint merger, which will have significant consequences for consumers and competition," said Michael Copps, special advisor to Common Cause and former Democratic FCC chairman. "All of the evidence in this proceeding shows that this merger is inherently illegal under antitrust law. Even evidence presented at the trial revealed the companies’ executives acknowledged prices for wireless service would rise if the merger was approved. The Court’s decision will reduce the wireless market from four to three national carriers, undoubtedly raising prices on wireless customers."

After receiving a favorable decision in federal court that dismissed attempts by several states to block their merger, T-Mobile and Sprint said they are moving toward closing the deal that will create a stronger No. 3 wireless carrier.

U.S. District Court Judge for the Southern District of New York Victor Marrero ruled Tuesday that the merger, first proposed more than a year ago, would be in the public interest.

Several states attorneys general sued to block the deal last year, claiming that a combined T-Mobile and Sprint would lead to higher wireless prices and lessened competition. In his ruling, Judge Marrero wrote that the deal would likely “enhance competition in the relevant markets to the benefit of all consumers.”

The Federal Communications Commission approved the deal in November, and Tuesday FCC chairman Ajit Pai praised the merger, adding in a statement that it would help close the digital divide.

“This is a big win for American consumers,” Pai said in a statement.

[embed]https://twitter.com/AjitPaiFCC/status/1227227915655372800[/embed]

With those approvals in hand, T-Mobile and Sprint have the green light to go through with their $26 billion union.

Investors were pleased that the deal is closer to the finish line, driving T-Mobile stock up 11%(9.27 each) to $93.80 per share, and Sprint stock up 71% ($3.39 each) to $8.19 per share in early trading Feb. 11.

“Today was a huge victory for this merger … and now we are FINALLY able to focus on the last steps to get this merger done!” T-Mobile CEO John Legere said in a press release. “We want to thank the Court for its thorough review of the facts we presented in our case. We’ve said it all along: the New T-Mobile will be a supercharged Un-carrier that is great for consumers and great for competition. The broad and deep 5G network that only our combined companies will be able to bring to life is going to change wireless … and beyond. Look out Dumb and Dumber and Big Cable – we are coming for you … and you haven’t seen anything yet!”

The deal is still subject to merger conditions, but is expected to be closed by April 1. Also as part of the merger, Dish Network has agreed to purchase Sprint’s prepaid wireless businesses (Boost Mobile and Virgin Mobile) for $1.4 billion and pony up about $3.6 billion for 800 Megahertz of wireless spectrum from the combined T-Mobile-Sprint over three years. The Dish deals would take effect after the T-Mobile-Sprint closing.

The state's have the right to appeal, but that probably won't be in time to prevent the merger. Nevertheless, that hasn't stopped some state officials from voicing their displeasure with the ruling.  

"...We disagree with this decision wholeheartedly, and will continue to fight the kind of consumer-harming megamergers our antitrust laws were designed to prevent," New York State Attorney General Letitia James said in a statement. "As we review our options, including a possible appeal, Americans should continue to hold the companies to account for their promises."

California State Attorney General Xavier Becerra also is evaluating whether to file an appeal, according to reports. 

Still, that wasn't enough to damper the Sprint's enthusiasm.

“Judge Marrero’s decision validates our view that this merger is in the best interests of the U.S. economy and American consumers,” Sprint executive chairman Marcelo Claure said in a press release. “Today brings us a big step closer to creating a combined company that will provide nationwide 5G, lower costs, and a high-performing network that will invigorate competition to the benefit of all mobile wireless and in-home broadband consumers. With the support of federal regulators and now this Court, we will focus on quickly completing the few remaining necessary steps to close this transaction. I am proud of my Sprint team’s dedication, passion and resilience throughout the merger review process, and we are ready to make the vision of a New T-Mobile a reality.”

Earlier, Legere said he would step down as CEO of T-Mobile at the end of April after the deal is complete, handing over the reins of the combined company to chief operating officer Mike Sievert. 

The trial in the legal challenge by some state attorneys general to the T-Mobile-Sprint merger began Monday (Dec. 9) in a New York district court.

T-Mobile and Sprint have pledged not to close their deal until the state AG suit is resolved. The deal has been approved by the FCC and passed antitrust muster--with conditions--at the Justice Department.

Related: More States OK with T-Mobile-Sprint

“The megamerger of T-Mobile and Sprint would reduce competition in the mobile marketplace and be bad for consumers, bad for workers, and bad for innovation," said New York attorney general Letitia James, who along with California AG Zavier Becerra, were the lead states on the suit. "We simply must protect consumers from unchecked corporate dominance and make sure competition in the marketplace yields better outcomes for cell phone customers and workers alike.

Becerra said the merger would hurt consumers and said he was confident they had the law on their side.

Related: Civil Rights Groups Strike Deal with T-Mobile-Sprint

The government says that the combo creates a stronger number three competitor to Verizon and AT&T given that the DOJ settlement requires it to  spinoff pre-paid wireless operator Boost Mobile to Dish, which they say will morph into a fourth facilities-based carrier. The AGs argue that it will instead reduce competition with no guarantee that Sprint will ever morph into a new "uncarrier."

Joining California and New York in the suit are Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Oregon, Pennsylvania, Virginia, Wisconsin, and the District of Columbia.

A number of other states including Colorado, Florida, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, Nevada, South Dakota and Texas have joined DOJ's settlement approving the deal with conditions. 

Last year at this time, the top U.S. wireless companies were loudly trumpeting what Verizon Communications chairman and CEO Hans Vestberg hyperbolically called “the fourth industrial revolution”: the debut of 5G wireless network technology.

Cable operators were warned to be afraid — very afraid — of a revolutionary new wireless technology that would end their dominance in wireline broadband. But as the wireless titans pressed to declare themselves first in the U.S. market with a 5G service, they ended up with mud on their faces.

Verizon rolled out a fixed 5G service based on speedy “millimeter wave” technology in Los Angeles, Houston, Sacramento, California, and Indianapolis. Verizon openly targeted cable broadband. But analysts largely declared the gambit to be vaporware, with hardly anyone able to access the service, which requires a fairly dense infrastructural buildout to work.

AT&T, meanwhile, got itself accused of false advertising — and was even sued by Sprint — when it started branding its 4G LTE signal as “5G Evolution.” Indeed, AT&T subscribers in select markets saw a display on their phone indicating they were connecting to “5G E,” when really they were only connecting to upgraded portions of AT&T’s 4G LTE network.

A year later, both wireless giants appear to have the goods, at least to some extent. But neither offering comes close to the massive hype put forth by the U.S. mobile industry about the so-called fifth-generation network technology, an ultra-fast, super-low-latency proposition that’s supposed to revolutionize everything from autonomous cars to remote medicine.

Over the next few weeks, AT&T is rolling out real 5G — not the 5G E fake stuff — in Indianapolis, Pittsburgh and San Diego, as well as Providence, Rhode Island, and Rochester, New York. In February, additional launches will include 10 more cities: New York City and Buffalo, New York; San Francisco and San Jose, California; Boston; Las Vegas; Milwaukee; Birmingham, Alabama; and Bridgeport, Connecticut.

To benefit from AT&T’s new 5G service, customers must live in one of the 15 cities and must also subscribe to one of two AT&T unlimited data plans. They must also pay around $1,300 for a new Samsung Galaxy Note Plus 5G smartphone. Customers will not see their wireless bills bumped up by 5G, at least not at first.

T-Mobile also has plans to roll out a nationwide 5G service this week, one that will also use the Samsung Galaxy Note 10 Plus 5G and the less-expensive OnePlus 7T Pro 5G McLaren. Outgoing T-Mobile CEO John Legere has promised to deliver low-band 5G coverage to 5,000 cities covering 200 million wireless customers by the end of the year, a pledge dependent on T-Mobile’s ability to close its merger with Sprint.

More Limited Than LTE

As for that coverage, it will be far more limited than the carriers’ fully baked and ubiquitous 4G LTE service, as the AT&T coverage map of New York shows. Belying the hype, the 5G performance will actually be roughly the same as LTE Advanced technology, a speedy version of 4G, since both T-Mobile and AT&T are using regular low-band spectrum and not millimeter wave.

Millimeter-wave spectrum is made up of ultra-high frequency radio waves in the 24 Gigahertz to 100 GHz range, which can hold and deliver gobs more data. Early 5G networks using millimeter-wave technology promise speeds as high as 6 Gigabits per second, evolving one day to as high as 20 Gbps. Latency is also vastly improved, too, going from 20-70 milliseconds with 4G to as low as the ultra-responsive sub-1 millisecond range.

Spotty at Best

Millimeter wave actually seems capable of delivering on all of that 5G hype, but as Verizon is finding out, establishing ubiquitous 5G coverage is no small engineering feat. The ultra-high frequencies require signals to broadcast at very short range — around 600 to 800 feet — meaning Verizon must festoon every street in each city where it deploys 5G with gobs of “small cell” devices. These short-throw, ultra-high frequencies are also prone to all sorts of interference, falling leaves included. And they don’t penetrate walls or buildings.

In April, six months after its dud-like premiere of fixed 5G service, Verizon declared itself first to market again when it rolled into Chicago and Minneapolis with a smartphone-targeted 5G service, also based on millimeter-wave tech.

That service is now in 18 cities, but access is typically limited to select, heavily populated urban centers. When Multichannel News sister publication Tom’s Guide road-tested Verizon’s 5G service back in April, finding a connection was challenging. When Tom’s Guide testers did find a connection, it would be lost simply by crossing the street. Often, when they would come back to the same location 12 hours later, that connection would no longer be available.

Verizon — which just released coverage maps of its 5G markets — said it has now doubled the number of small cell devices in Chicago and other markets, significantly improving coverage.

Meanwhile, as Verizon’s millimeter wave coverage improves, it’s delivering on promises of improved network speeds. Using the Samsung Galaxy S10 5G smartphone, Tom’s Guide said it experienced download speeds as high as 1 Gbps in the Windy City. For context, similar tests in the area for LTE yielded speeds in the 85 Mbps range.

Nevada and Texas have dropped out of the multistate lawsuit seeking to block the T-Mobile-Sprint merger, now pending before the Southern District of New York (Judge Victor Marrero).

Nevada attorney general Aaron Ford said the commitments the state has gotten from T-Mobile and Sprint include a "philanthropic contribution" of $30 million in three installments "to enhance service to our Native American Tribal communities, contribute to programs that enhance opportunities for minorities, women and small businesses." That is in addition to commitments on 5G network buildouts, low-priced mobile plans for six years, job commitments and a broadband access education effort.

Related: Arkansas Drops Out of T-Mobile-Sprint Suit

Texas attorney general Ken Paxton said the settlement "ensures that the New T-Mobile is not in a position to overcharge Texans for wireless service, and at the same time, obligates the New T-Mobile to invest in a high-quality 5G network that will serve the needs of Texas’ growing economy, or face stiff financial penalties.”

According to Paxton's office, the agreement will:

"Give all Texas customers access to the same or better unlimited talk, text, and data rate plans as those offered by T-Mobile as of the date of the agreement for the next five years;

"Give all Texas customers access to T-Mobile limited data rate plans at a cost far below what is currently offered in the industry;

"Commit to provide 5G wireless broadband coverage to areas where most Texans live, including most Texans living in rural portions of the state within the next three years and to expand that 5G coverage dramatically within the next six years; and

"Offer Texas residents that are currently employed by Sprint and T-Mobile substantially similar employment with the New T-Mobile."

T-Mobile and Sprint have pledged not to close their deal until the state AG suit is resolved. The deal has been approved by the FCC and passed antitrust muster--with conditions--at the Justice Department.

FCC Commissioner Brendan Carr says that "a lot of regulators" are "struggling" with a lack of vision, and suggested that criticism begins at home. 

Carr, who was being interviewed for C-SPAN's Communicators series, said that competition authorities, including the FCC, need to be able to pass the Gretzky test (hall of fame hockey player Wayne Gretzky), which is skating to where the puck is going to be (in this case the 5G puck), not where it is now. 

He said he was seeing that lack of vision when it comes to 5G and regulators "not seeing how truly disruptive it is going to be." 

He then tied that lack of vision to the 3-2, with Democrats dissenting, vote to approve the T-Mobile-Sprint deal, a deal he said would create a stronger wireless broadband competitor to Verizon and AT&T--Sprint and T-Mobile have argued that they need the deal to make them a 5G player. One of the conditions on the deal is that they will deploy 5G service to 85% of rural Americans within three years and 90% of rural Americans within six years, for example. 

"Some people have voted against [the deal]," Carr said—though not mentioning Democrats Jessica Rosenworcel and Geoffey Starks, who voted against the deal, even when pressed. He said the dissenters were suggesting the status quo should be preserved because this was the golden age of wireless (Rosenworcel said in her dissenting statement that "the T-Mobile-Sprint merger will end a golden age in wireless"). "I don't think so," he said. Carr pointed out that cable providers are adding more wireless subs than wireless companies, while wireless is looking to 5G for in-home broadband in competition to fixed providers like cable ops.  

He said with "vision," the T-Mobile-Sprint deal makes sense, and seeing that "shows you understand where technology is moving." He also suggested that states suing to block the deal also lack that vision to see the deal as providing a strong third competitor that will give viewers the increased choice they want. 

The episode airs Saturday, Nov. 23, at 6:30 ET on C-SPAN and Monday, Nov. 25, at 8 a.m. and 8 p.m. ET on C-SPAN2.

The MVNO arrangement between Altice USA and Sprint is unique, in that the cable operator owns an increasing amount of the wireless network as it continuously builds out infrastructure.

But while the 19,000 small cells deployed by Altice USA in the Long Island area may be effectively reducing the cable operator’s reliance on the MVNO for its nascent mobile service, the agreement is not helping Sprint’s network performance, New Street Research analyst Spencer Kurn said in a report to investors published Tuesday.

Citing results from a survey of 1,000 local customers, as well as data from network testing outfit Tutela, Kurn wrote, “The network is disappointing. Based on the Tutela data and our own speed tests, it doesn’t seem like the deployment of 19,000 small cells has improved Sprint’s network much. There is little evidence of improvement year over year; Sprint’s network in Long Island appears worse than in the rest of the country, and Sprint still lags the other national carriers in Long Island.

“Sprint’s network has always lagged the other three carriers in terms of network performance,” Kurn added. “The primary reason has been the amount of low frequency spectrum they have and the amount of nodes. We had thought that Altice deploying 19,000 small cells would really close the gap, but the data doesn’t show that. Sprint still lags other carriers by a pretty wide margin.”

Tough zoning laws have traditionally made Long Island a difficult market for wireless operators to increase network capacity. And Kurn conceded that at least to some degree, Altice’s small cells must be enhancing Sprint’s network.

“But it’s very possible the absence of the low-frequency spectrum really limits the range of Sprint’s network,” he said. The small cells aren’t going to improve that that much. It’s still disadvantaged from a coverage perspective.”

What is the status of the FCC's T-Mobile-Sprint 180-day merger review shot clock?  

Deal watchers could be forgiven for being confused. According to the FCC website, the clock on the FCC's review continues to run, currently on day 332 of the FCC's merger review, but looks can be deceiving. 

Actually, the review has been completed and the merger approved by a vote of 3-2 Oct. 16. The Republicans voted early and the Democrats eventually weighed in with their dissents. So while Oct. 16 was the official approval, the deal even then already had garnered the three votes it needed to pass.

Related: Petition Filed to Delay T-Mobile-Sprint Decision 

But in regulation, as in sports, it ain't over 'til its over. 

The FCC has yet to release the item, to which the merger review clock is tied. Some redactions were needed (to protect competitively sensitive info, for example) and commissioners are given some time after a vote to craft their official statements. Then the chairman gets some time to craft a response, if he chooses, before the vote is official. 

A source said the item should be released soon, while an FCC official said that when that happens, the clock will be "retroactively stopped to the day the vote was final [Oct. 16]." Which the official said is consistent with past practice.  

The deal, which was filed with regulators almost a year ago, still won't close, even though the Justice Department has already reached an agreement that resolves its antitrust issues with the merger. A bunch of states have challenged the Justice Department's settlement with the companies and T-Mobile has pledged not to close the deal until "six days" after that court case is resolved.  

So, although the FCC has completed its review of the merger, the merger review clock continues to tick on. And, although both the FCC and Justice have said they are OK with the deal closing, it won't be closing anytime soon. The trial in the state challenge does not even begin until Dec. 9.

Colorado is joining a handful of states in joining the Justice Department's settlement agreement with T-Mobile-Sprint. 

Florida, Kansas, Louisiana, Nebraska, Ohio, Oklahoma and South Dakota have already signed on, though far more states are joined in a suit to try and block the deal. 

Related: Texas Joins T-Mobile/Sprint Suit 

The Justice Department has signed off on the deal, with conditions, but a federal court still has to sign off on those conditions to make sure they are in the public interest. Usually that court approval--per the Tunney Act--is mostly pro-forma, but there is still a comment process and deal critics have been making their case there. 

The FCC has voted to approve the deal, contingent on the DOJ settlement terms, notably that the combined company will spin off Boost Mobile and Sprint Mobile to Dish (it is based in Colorado), which has pledged to be a wireless competitor, ultimately a facilities-based competitor, to the combined company, and that T-Mobile-Sprint will speed the rollout of 5G. 

“We are pleased that Colorado has left the New York and California litigation and is seeking to join our settlement,” said Assistant Attorney General Makan Delrahim, head of the Justice Department’s Antitrust Division. “The merger, with the divestitures, will benefit Coloradoans and American consumers nationwide.” 

T-Mobile and Sprint have agreed not to close the deal until six days after a decision, so the deal won't close until at least early 2020. 

The states suing to block the deal include Texas, Pennsylvania, New York, California, Connecticut, the District of Columbia, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, Virginia, and Wisconsin. 

A New York district court hearing that case granted the AGs' request for more time for discovery in the case and to incorporate DOJ's settlement, so agreed to delay the start of the trial from Oct. 7 to Dec. 9.  

Even as the FCC is expected to soon approve the merger of T-Mobile and Sprint, which FCC chair Ajit Pai has publicly supported, the chairman has now launched an Enforcement Bureau investigation into what he said is an "outrageous" apparent violation of the FCC's rules on Lifeline broadband subsidies. 

Sprint said it was a mistake it has fixed and would pay back the money.

"The Federal Communications Commission has learned that Sprint Corp. claimed monthly subsidies for serving approximately 885,000 Lifeline subscribers, even though those subscribers were not using the service," the FCC said, which would violate its "non-usage" rule meant to prevent waste, fraud and abuse.  

Related: Pennsylvania Joins T-Mobile-Sprint Suit

The FCC did not call it an apparent violation, but instead treated it as an established problem the "full extent" of which now needs to be investigated and responded to. 

That rule requires Lifeline providers to "de-enroll" subs who aren't using their phones. The FCC said Sprint's violation was uncovered by the Oregon Public Utility Commission, which Pai thanks for its efforts. “States are an important partner with the FCC in both helping low-income consumers get access to affordable communications through Lifeline and cracking down on waste, fraud, and abuse in the program," he said.  

Preventing that abuse has been behind Pai's efforts to make it more accountable and prevent just the sort of abuse he said Sprint is guilty of. 

That 885,000 represents almost a third of Sprint's Lifeline sub base. The FCC-overseen Universal Service Fund provides $9.95-per-month subsidies to serve low-income consumers, but that service must be provided.  

“Lifeline is an important component of our efforts to bring digital opportunity to low-income Americans, and stopping waste, fraud, and abuse in the program has been a top priority of mine since I’ve been at the Commission,” Pai said. “It’s outrageous that a company would claim millions of taxpayer dollars for doing nothing. This shows a careless disregard for program rules and American taxpayers. "I have asked our Enforcement Bureau to investigate this matter to determine the full extent of the problem and to propose an appropriate remedy.” 

It is unclear what, if any, impact the investigation could have on the merger, though the FCC usually likes to wrap up legal loose ends before signing off on deals.  The Justice Department has already agreed not to block the deal on various conditions. 

"It cuts both ways," said MoffettNathanson senior analyst Craig Moffett of the impact on the merger. "On the one hand, it is certainly a blow to Sprint’s credibility, and that’s an obvious negative for the merger. But it also highlights how precarious Sprint is as a fourth operator, so I suppose that could be spun as a positive for the deal, inasmuch as a merger would effectively take them out as an independent operator."

Sprint countered the FCC in a statement, saying that the problem was an error it had since fixed and would reimburse the federal  and state governments.

"In 2016, the FCC approved sweeping changes to the Lifeline program," the company said in a statement. "These changes required Sprint to update how it calculates usage and therefore eligibility of Lifeline customers. An error occurred when these new requirements were implemented in July of 2017.

"When the error was discovered, we immediately investigated and proactively raised this issue with the FCC and appropriate state regulators. We also engaged an independent third party to review the results of our review and the effectiveness of our operational changes.

"While immaterial to Sprint’s financial results, we are committed to reimbursing federal and state governments for any subsidy payments that were collected as a result of the error.

"We are proud of the benefits we provide to eligible low-income individuals through discounted wireless service. We believe this program is valuable for underserved populations."

Pennsylvania has joined the list of states whose attorneys generals have joined a suit to try and block the merger of T-Mobile and Sprint, which would combine the number three and four wireless carriers. 

That merger horse is close to being out of the barn already given that Justice has already agreed to the deal with conditions and the FCC has circulated an order approving the deal that has the support of the three Republican votes it needs to pass and is expected to be approved as soon as the two Democrats have been given the customary time to vote--after which it is deemed granted with the majority of three Republican votes.  

Related: Texas Joins T-Mobile-Sprint Suit 

The government says that the combo will create a stronger number three competitor to Verizon and AT&T, and the condition that spinning off pre-paid wireless operator Boost Mobile to Dish will seed a fourth facilities-based carrier. The AGs argue that it will instead reduce competition with no guarantee that Sprint will ever morph into a new "uncarrier."

“Pennsylvania’s addition to our lawsuit adds to the states’ momentum against this megamerger that continues to be bad for consumers, bad for workers, and bad for innovation,” said Attorney General Letitia James of New York, one of the lead states on the suit. 

"The merger between T-Mobile and Sprint would severely undermine competition in the telecommunications sector, which would hurt Pennsylvanian consumers by driving up prices, limiting coverage, and diminishing quality," said Pennsylvania Attorney General Josh Shapiro of his state's addition to the suit. 

A total of 18 AGs are on the suit. The others are California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, Oregon, Texas, Virginia, Wisconsin and the District of Columbia. 

A New York district court last month granted the AGs' request for more time for discovery in the case and to incorporate DOJ's settlement, so agreed to delay the start of the trial from Oct. 7 to Dec. 9. At the time, they said other states might be joining.  

T-Mobile and Sprint have agreed not to close the deal until six days after a court decision, so the deal, if it survives that court gauntlet, won't close until at least early 2020. 

After several years and at least three attempts to enter the wireless communications business through the front door, Dish Network found a side entrance into the elusive and highly competitive market, agreeing to buy assets from a newly combined T-Mobile-Sprint to become the nation’s fourth facilities-based wireless carrier.

The details have been available for days, but became official on Friday. Dish will pay about $1.4 billion for Sprint’s prepaid wireless business Boost Mobile and Virgin Mobile, and pony up about $3.6 billion to buy 800 Megahertz wireless spectrum from T-Mobile-Sprint in three years. Dish also will have access to the T-Mobile-Sprint network for seven years.

“These developments are the fulfillment of more than two decades’ worth of work and more than $21 billion in spectrum investments intended to transform Dish into a connectivity company,” Dish chairman Charlie Ergen said in a press release. “Taken together, these opportunities will set the stage for our entry as the nation’s fourth facilities-based wireless competitor and accelerate our work to launch the country’s first standalone 5G broadband network.”

Related: $10B Price Estimate for Dish 5G Buildout is “Just Silly,” Analyst Says 

Dish, which began hoarding wireless spectrum almost a decade ago,  has tried to buy into the wireless business before, including an aborted attempt to purchase WiMax pioneer ClearWire in 2012, and two tries to purchase Sprint in 2013. 

The irony was not lost on Ergen, who in a press release said “We’ve been here before.” But the satellite TV pioneer pushed back on skepticism that he will be able to succeed in the cutthroat wireless market, saying he faced the same attitude when he launched his satellite TV business in 1995.

“[C]ustomers loved the disruption we brought to the marketplace with innovations such as a 100-percent digital experience, local-into-local broadcast, the DVR and ad-skipping,” Ergen said in the release. “...As we enter the wireless business, we will again serve customers by disrupting incumbents and their legacy networks, this time with the nation’s first standalone 5G broadband network.”

Ergen will have a head start. With the purchase of Boost Mobile and Virgin Mobile, Dish will have about 9.3 million customers in 50 states and Puerto Rico. At close, expected within three months of the completion of the T-Mobile-Sprint merger, Sprint’s prepaid businesses and customers will immediately move to Dish, as will the more than 400 employees and nationwide independent retail network that supports more than 7,500 retail outlets.

Dish will activate all new wireless customers on the New T-Mobile network. Existing prepaid customers will be supported on the Sprint legacy network and will eventually transition to the New T-Mobile network.

Dish also has committed to new buildout schedules associated with the company’s 600 MHz, AWS-4, 700 MHz E Block and AWS H Block licenses. In addition, Dish has committed to deploy 5G Broadband Service utilizing those licenses.

As a result, Dish has agreed to deploy a nationwide 5G broadband network covering at least 70% of the country by June 14, 2023. If it fails to meet the deadline, Dish will make voluntary contributions to the U.S. Treasury of up to $2.2 billion.

Sullivan & Cromwell LLP acted as lead legal counsel to Dish.

WASHINGTON — The Justice Department, five state attorneys general and T-Mobile-Sprint have reached an agreement on the proposed merger of the No. 3 and 4 wireless carriers, conditioned on, among other things, the spinoff of Boost Mobile and some spectrum assets to Dish Network.

According to the settlement, “T-Mobile and Sprint must divest Sprint’s prepaid business, including Boost Mobile, Virgin Mobile and Sprint prepaid, to Dish Network Corp., a Colorado-based satellite television provider. The proposed settlement also provides for the divestiture of certain spectrum assets to Dish. Additionally, T-Mobile and Sprint must make available to Dish at least 20,000 cell sites and hundreds of retail locations. T-Mobile must also provide Dish with robust access to the T-Mobile network for a period of seven years while Dish builds out its own 5G network.”

“With this merger and accompanying divestiture, we are expanding output significantly by ensuring that large amounts of currently unused or underused spectrum are made available to American consumers in the form of high quality 5G networks,” U.S. Justice Department antitrust chief Makan Delrahim said of the settlement. “Today’s settlement will provide Dish with the assets and transitional services required to become a facilities-based mobile network operator that can provide a full range of mobile wireless services nationwide. … In crafting this remedy, we are also mindful of the significant commitments T-Mobile, Sprint, and Dish have made to the Federal Communications Commission.”

But due to an extant court challenge by other attorneys general, the deal won't close for months, and then only if the AGs don't win, according to a spokesperson from the California Justice Department.

Delrahim has long said he favors spinoffs to bring deals inside the antitrust ropes, rather than behavioral conditions that must be continuously monitored, though there will be some of the latter as well.

The Federal Communications Commission‘s Republican majority has already signaled it can approve a deal with the Boost spinoff and other conditions the companies have volunteered.

The DOJ announced the deal, essentially filing suit and announcing the settlement at the same time, on Friday (July 26) after reports it could come earlier in the week, but had been delayed.

Still to be resolved is a lawsuit involving more than a dozen state attorneys general (including New York and California), who have sued in a U.S. District Court in New York to block the deal (a status conference is set for Aug. 1).

That will push the deal‘s closing into late in the year or early 2020.

According to a copy of the case scheduling order supplied by an official of California's Justice Department, T-Mobile and Sprint submitted a letter to the court saying: “Defendants agree not to consummate or otherwise complete the challenged transaction until 12:01 a.m. PT on the sixth day following entry of a final and appeal-able judgment, and only if the Court enters judgment in favor of Defendants or otherwise permits consummation of the challenged transaction.”

The trial isn't even scheduled to start until Oct. 7, and the states have asked for that date to be pushed back.

New York State Attorney General Letitia James signaled the states in that suit, which also include California, Colorado, Connecticut, the District of Columbia, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, Virginia, and Wisconsin, aren't ready to throw in the legal towel.

“Here in California and across our coalition of states, our concerns with this merger have been, are, and continue to be about the harms posed by over-consolidation and diminished market competition," said California AG Xavier Becerra, who didn't sound like he favored withdrawing the suit, either (California was a lead plaintiff), though he did add "intend" and "prepared" to his assertion they were still headed to court. "A marketplace with fewer active competitors drives up costs, reduces consumer choice and thwarts innovation. We intend to be prepared to go to trial to fight for a fair, competitive, and equitable marketplace for consumers nationwide.” 

"Based on the information available to date, the states continue to have serious concerns with the merger and whether the deal with Dish will create a fourth independent competitor that addresses the loss to competition otherwise caused by this megamerger," James said.

And FCC chairman Ajit Pai must still circulate his order and given August vacations, it will be tough to get a final vote until September. Calling it a ”new deal,” Democratic commissioner Jessica Rosenworcel has already called for the chairman to let the public comment on that ”new deal’ before a vote, which the chairman is highly unlikely to do. 

And even when the FCC does approve, opponents could challenge that decision in the D.C. federal appeals court, asking it to stay the FCC's decision until the state case is resolved.

Pai has said that approving the deal is key to winning the race to 5G. One of the companies’ arguments for letting them get together was that they could do 5G faster than if they were apart.

The Trump administration has made winning that race a national priority.

One deal critic didn't see the deal as creating a wireless competitor — Dish Network — to keep the U.S. market at four major players.

"This deal creates a faux competitor, not a real one, which is why I would bet on the states in their forthcoming court challenge," Benton Foundation senior counselor Andrew Schwartzman said. "Dish is buying Boost, a brand which sells prepaid service to low-end consumers. Dish will start with none of the lucrative postpaid customers, no brand name and no retail network. Even if Dish successfully builds out its own network, that could not happen for several years, during which time the three big wireless companies will be able to lock in their customers and introduce their 5G technologies.”

In other words, rather than having Sprint as a weak fourth competitor, the combined companies will now face an extremely weak fourth competitor.

"One other thing frequently overlooked is that T-Mobile will actually benefit from having Dish as a wholesale customer,” Schwartzman said. “That means that it will be selling otherwise unused capacity for the next several years. Just as airlines are better off filling empty seats with discounted sales, so too, will T-Mobile will be able to operate its network more efficiently as a result."

Signs are good that the Justice Department will be announcing its decision on the T-Mobile-Sprint merger Friday morning. 

Late Thursday night, DOJ said the antitrust chief Makan Delrahim will be holding a "pen and paper" briefing at 11 a.m. Friday (July 26) to announce "a significant merger enforcement action." 

DOJ did not say which merger it was, but it is likely to be that one. 

FCC chairman Ajit Pai has already signaled he supports the deal on condition that T-Mobile spins off its Boost Mobile prepaid business and some spectrum, which DISH is expected to buy. 

Pai has called the deal "a unique opportunity to speed up the deployment of 5G throughout the United States and bring much faster mobile broadband to rural Americans. We should seize this opportunity.”  

His fellow Republicans have signaled they are okay with it, too, so it should have the votes to pass. 

 T-Mobile has been saying that without the deal the company would not be able to build out that national 5G network as quickly.  

Pai also said that the combined company has "offered specific commitments regarding the rollout of an in-home broadband product, including to rural households."  

According to FCC officials speaking on background, the companies have promised to structure the Boost divestiture so that Boost has the incentive and ability to compete with T-Mobile-Sprint in the low-cost market, and vice versa, notwithstanding the wholesale agreement between the new company and Boost.

Journalists covering the media beat are hoping the U.S. Court of Appeals for the D.C. Circuit does not choose about the same time to announce its decision on the challenge to the FCC's network neutrality rules.

The court generally releases its decisions Tuesdays and Fridays between 10 and 11 a.m. 

T-Mobile USA released its second quarter financial results at around 4 p.m. on Thursday as promised, but failed to hold a planned conference call with analysts that many hoped would include the announcement of its pending $26.5 billion merger with No. 4 wireless carrier Sprint. Instead, investors will have to wait, as reports said the U.S. Dept. of Justice was talking with several state attorneys general to sign off on a deal that would join the two wireless giants. 

Sprint and T-Mobile were said to be close to obtaining that approval, as reports said earlier Thursday that the companies and government regulators agreed on a plan that would make Dish Network a fourth national wireless competitor.  According to those reports, Dish would pay $1.4 billion to buy Sprint’s Boost Mobile prepaid wireless business and shell out another $3.6 billion three years later to buy a swath of 800 Megahertz wireless spectrum.

The news sent Dish stock into a tailspin early Thursday -- it dipped as much as 6.2% earlier in the day before closing at $39.17 per share, down 5.8%, or $2.39 each. Sprint shares closed down almost 3% to $7.44 each, while T-Mobile stock was down about 1% to $79.91 each. 

In June, attorneys general from nine states and the District of Columbia filed a lawsuit to block the Sprint-T-Mobile merger, claiming it would result in higher prices for cellular phone service. 

According to a report in the Wall Street Journal, the Dept. of Justice was meeting with several of those AGs to gain their support for the merger.

T-Mobile said earlier Thursday it would push up the release of Q2 earnings from 9 a.m to 4:01 p.m., and hold a conference call at 4:30. That helped fuel some speculation that a Sprint deal would be announced. But that didn’t come. T-Mobile didn’t say when it would reschedule the conference call, but some reports said they expect the Justice Dept. to announce its approval of the deal by Friday.

[embed]https://twitter.com/CGasparino/status/1154468795466960896[/embed]

T-Mobile reported 1.8 million net subscriber additions in the second quarter, up 11% from the prior year, while total revenue rose 4% to $11 billion and net income rose 20% to $939 million, or $1.09 per share. Cash flow rose 7% in the period to $3.5 billion, the company said. 

Dish Network shares plunged Thursday after reports surfaced that the satellite TV giant would pay as much as $5 billion for wireless assets associated with the pending T-Mobile-Sprint merger to become a fourth mobile service provider.

Dish shares were down as much as 6.2% ($2.58) in early trading Thursday to $38.97 each, as reports surfaced that the satellite TV company had agreed to a deal that would have it initially buy Sprint’s prepaid wireless business and eventually purchasing spectrum from the larger carrier for its own mobile service. The stock was trading at $39.59 each at 10:58 a.m. on Thursday, down $1.97 each (4.7%).

Most analysts saw the deal as a good one for Sprint and T-Mobile — basically it increases the chances of the merger winning regulatory approval while creating a not-so-strong fourth competitor — and bad for Dish. Investors seemed to agree.

According to The Wall Street Journal, Dish would pay about $1.4 billion for Sprint’s prepaid wireless business Boost Mobile, which has about nine million customers, and another $3.6 billion for 800 Megahertz wireless spectrum about three years later. Dish also reportedly has agreed not to sell the assets for three years. The 800-MHz spectrum is important because it allows Dish to build out wireless service in rural areas, an area the government feels is underserved by wireless.

In a research note, MoffettNathanson principal and senior analyst Craig Moffett wrote that the deal is good for Sprint and T-Mobile because it would get their merger approved without creating a powerful fourth competitor. Dish gets additional spectrum, an existing wireless business — albeit in the somewhat sketchy prepaid arena, and solves some issues regarding federal buildout requirements for the spectrum it already owns. But it’s a different story for Dish investors, according to Moffett.

“We’ve warned for at least five years that if and when Dish’s spectrum holdings ever come to be viewed as an operating asset rather than an asset held for sale, well… look out below,” Moffett wrote.

According to the analyst, every valuation of Dish anticipates that its existing spectrum will be sold. While reports say that Dish would have to agree not to sell its wireless business for three years, Moffett wrote that just covers the MVNO agreement. Selling the spectrum itself would require a much longer moratorium.

Absent a sale, Dish would have to be valued on a discounted cash flow basis, like other stocks.

“Good luck with that,” Moffett wrote, adding that to justify its current stock price range of about $40 per share, the spectrum form the deal would have to have a value of between $20 billion and $28 billion. T-Mobile’s purchase of Sprint in its entirety is valued at $26.5 billion.

And he added that it is difficult to value a Dish business that doesn’t exist yet (wireless) on a DCF basis, given that Sprint has been in the business for more than 20 years and still hasn’t managed to generate free cash flow.

[embed]https://twitter.com/TMobileIR/status/1153759641932722176[/embed]

Adding to the uncertainty is whether the deal will pass muster with the attorneys general from nine states and the District of Columbia that have sued to block the deal. 

T-Mobile has pushed back its scheduled Q2 earnings release from 9 a.m. to 4:01 p.m Thursday, perhaps a sign that it is ready to clear up some of the questions surrounding the Sprint merger. A 4:30 p.m. conference call with analysts is slated to follow.

[embed]https://twitter.com/TMobileIR/status/1154213095645908992[/embed]

Google is staunchly denying a New York Post report that it’s in talks with Dish Network to form another major U.S. wireless carrier.

“These claims are simply false. Google is not having any conversations with Dish about creating a wireless network,” Google said in a statement.

As a condition of the regulatory approval of its merger with No. 4 carrier Sprint, No. 3 carrier T-Mobile has been asked by the Justice Department to divest enough assets to render another major mobile company—effectively a replacement for the competition the merger would take out of the market.

Dish Network, which has already acquired ample spectrum in recent years, is deep into negotiations with T-Mobile and its parent company, Deutsche Telekom, to acquire the offloaded assets.

According to the Post, Former Ford Motor Company CEO Alan Mulally, now director of Google parent company Alphabet, has recently conducted talks with Dish to partner up in creating a new telecom.

Acquiring equipment and technology divested by T-Mobile, the paper said Dish and Google could build a national mobile network within three years.

So why would Google be into this?

Google already has a consumer mobile business, Google Fi, which is based on MVNO agreements with T-Mobile, Sprint and US Cellular.

But according to BTIG Research analyst Walter Piecyk, Google’s priorities now rest in cloud services, where it competes with Amazon Web Services (AWS) and Microsoft Azure.

“The cloud is becoming more reliant on the last-mile providers,” Piecyk told the Post. “It’s in Google’s interest to make sure the last-mile provider is inexpensive.”

FCC Chairman Ajit Pai told a New York State Wireless Association audience Tuesday that closing the digital divide is his top priority, that rolling out 5G is a key element, and that when it comes to the midband spectrum that is the sweet spot for next gen wireless, "one of the most critical steps that the FCC can take is to approve the T-Mobile/Sprint transaction." 

Pai has publicly declared himself in favor of the deal, and has been seconded by the two other Republican members of the commission, meaning he has the votes to approve. The Justice Department has not similarly weighed in on the deal and there are reports of a divide at DOJ over whether the deal would create a stronger number three wireless competitor to AT&T and Verizon or anticompetitively reduce the major carriers from four to three. 

Related: Answering the Call for Rural Broadband 

"Right now, Sprint has tremendous mid-band spectrum resources," he said. "But the record before the FCC makes clear that the company standing alone does not have the capacity to deploy 5G in this spectrum throughout large parts of rural America. On the other hand, if the T-Mobile/Sprint transaction is approved, the combined company will have the capacity to do just that. Indeed, they have committed to the FCC that they will deploy mid-band 5G to 88% of our nation’s population, including two-third of rural Americans. And there would be significant financial penalties if these commitments were not met." 

He did not mention, perhaps becuase it was not to the 5G buildout point, but the companies have also agreed to spin off low cost, prepaid operation, Boost Mobile, after the FCC registered competitive concerns, Pai has said previously. 

Pai said he would be circulating an order approving the deal to the other commissioners, but has yet to do so according to the FCC Web site list of items on circulation. 

Critics of Pai's announced support for the deal, which was somewhat unusual given that no order had yet been circulated, are concerned the White House might share the view that the deal helps win the 5G race, so pressured that outcome. Pai has said the White House did not contact him about the deal. But the chairman has also made no secret of the White House's interest in 5G, something he also talked about in his speech. 

Last fall, the White House hosted a summit on 5G that attracted senior leaders from across industry and multiple federal agencies." he said. "And just a couple months ago, to make sure 5G gets that attention that it deserves, the President personally invited me to the White House, where I announced the FCC’s latest actions to promote U.S. leadership in 5G." Those did not include his support of the T-Mobile/Sprint deal, which was not announced until after that. 

The chairman also defended his support of the deal in letters--released June 25--to concerned Democrats on the Hill., calling the deal a "unique opportunity to speed up the deployment of 5G throughout the United States and bring much faster mobile broadband to rural Americans. We should seize this opportunity."

The ongoing T-Mobile U.S.-Sprint merger received yet another twist over the weekend with reports that Dish Network was among three companies vying for wireless assets that would be divested in order for the larger deal to pass regulatory muster. But many analysts, who agree that a purchase of Sprint’s Boost Mobile prepaid wireless service could solve some pressing regulatory issues for the satellite giant itself, are hoping that Dish takes a hard pass.

According to the Wall Street Journal, Dish is taking the lead among possible bidders for Boost--Charter Communications and Altice USA are the other possible suitors. The paper said that Dish chairman Charlie Ergen, who has in the past been a staunch opponent of a T-Mobile-Sprint hookup, met with Federal Communications Commission chairman Ajit Pai and U.S. Dept. of Justice antitrust chief Makam Delrahim last week to discuss the need for a fourth national wireless service provider. The union of T-Mobile and Sprint would reduce the number of national providers to three, long a roadblock to a potential deal.

FCC chairman Pai has come out in favor of the merger,  and Delrahim, according to reports, could sign off on the deal if Sprint agreed to divest some assets to help create a fourth carrier. That’s where the sale of Boost would come in--the prepaid service could by some estimates satisfy the need for additional competition, especially if it had a partner that was from outside the wireless industry.

None of those companies would comment, but it appears that Dish would be the logical buyer in what some believe is an illogical deal.

But then again, we live in immensely illogical times. Dish Network stock rose nearly 4% Monday on the hope it would buy Boost. In a year where Dish has continued to watch its satellite TV business disappear--it lost 266,000 satellite subscribers in Q1--its OTT business stagnate--Sling TV gained just 7,000 customers in the same period--and the outlook for Q2 not much better, Dish stock has risen a staggering 57%. And all of that has been on deal speculation. Boost is just the latest target, earlier last month speculation was that Dish and DirecTV would finally merge, despite the fact that such a deal probably wouldn’t solve their problems either. 

Related: AT&T Needs to Kill DirecTV to Save It

Dish already owns a large swath of spectrum it has accumulated over the years, and is facing a federal deadline to have service available to 70% of its licensed area by March 2020. While those deadlines could probably be extended if Dish at least shows it is making progress--last year it said it would spend $1 billion initially to build a wireless Internet of Things network--buying Boost could possibly satisfy that requirement in one swoop.

But according to some analysts, that’s where the benefit of a deal ends for Dish.

In a blog post June 15, MoffettNathanson principal and senior analyst Craig Moffett wrote that a Boost deal would likely satisfy the FCC buildout issue. But it would also create more problems, the biggest of which would be driving “a stake through the heart of the only credible bull case for Dish Network shareholders, which is that Dish sells its spectrum. For obvious reasons, one couldn’t prop up Dish as the fourth competitor in the market without safeguards that would prevent Dish from then exiting by selling to one of the remaining three players shortly thereafter.”

BTIG telecom analyst Walt Piecyk wondered what benefit creating a viable fourth competitor would have for T-Mobile.

“If Delrahim’s goal is to ‘satisfy the concerns of his staff,’ which the press believes are to create a viable fourth competitor, we believe it will be challenging to extract enough concessions out of T-Mobile to actually attract someone meaningful,” Piecyk wrote in a blog post. “At some point T-Mobile’s owner, Deutsche Telekom, might simply prefer to continue to compete against a weakened Sprint than create something stronger that is centered around Dish or a cable operator.”

Piecyk also doubted whether Dish would be satisfied with some additional wireless licenses -- reports are that the satellite carrier would get some additional 2.5 GHz spectrum in addition to Boost.

“Network and spectrum assets could sweeten the opportunity for Dish, but more importantly, Dish would likely prefer clarity on several outstanding issues with the FCC,” Piecyk wrote. “Finally, we don’t believe Dish would agree to terms that restrict its ability to bring in Amazon or [Japanese e-commerce company] Rakuten as a strategic partner at a later date.”

Add to that the precariousness inherent in the prepaid wireless business. Moffett noted that Boost has relied on mega-retailer Walmart for a large chunk of sales, but that distribution channel is no more. And though Boost and Dish both cater to price-conscious customers, the former mainly competes in urban markets far from Dish’s increasingly rural base.

“We’re not sure why that deal is sensible for anyone involved,” Moffett wrote. “Dish, remember, already has more spectrum than they know what to do with; what they lack is money and ground facilities, and the deal described on Friday [June 14] wouldn’t deliver either one. Instead, it would make both problems worse.”

But all that doesn’t mean that Charlie Ergen won’t do a deal, and that investors won’t applaud him for it. The main driver of Dish stock for the past few years has been the wireless business, or more accurately, what Charlie will do with the wireless business. Early on, Dish rose because most investors thought he would sell his wireless licenses at an absurd profit. When that didn’t happen, the stock rose on whether he would partner or merge with a larger company that would help him build it out. Now it’s rising on the possibility that Ergen will acquire Boost at a bargain basement price, and use its prepaid wireless revenue to fuel whatever ultimate vision it has for the spectrum.

In an e-mail message, FBN Securities analyst Robert Routh, a long-time Ergen watcher, said of Dish getting into the prepaid wireless business: “Ergen is very smart and will do whatever he has to to ensure he can keep all the spectrum he has so if buying that and entering that business will do it, it would be viewed as a safe and smart move regardless of how Boost independently is perceived.”

And that may be how it all works out. Someone told me a long, long time ago that there is no money to be made by underestimating Charlie Ergen, and the Dish founder has proven that out time and time again. The story of Ergen’s past life as a professional gambler has been played to death but again, he has more often than not known when to hold ‘em, fold ‘em and when to double down. Maybe this is another one of those times.

Boost has some other problems though. According to Moffett, its churn rate is exceedingly high, and then there is the distribution question -- even if the government requires Sprint to continue selling the service through its Sprint retail stores as a condition of T-Mobile approval, there would be little incentive for an Sprint store employee to steer a customer towards the cheaper Boost service.

“That would leave Dish with a brand that has a churn rate as high as 5% per month to be spun off with an inadequate distribution front end, and with no realistic path to replace that front end before the subscriber base was, well, gone,” Moffett wrote.

The T-Mobile-Sprint deal could be announced as early as this week according to some reports, so the answers will likely be coming soon. In the meantime, Dish investors will wait anxiously for Charlie to show his cards.

Suburban New Yorkers will once again be able to buy a cellphone plan from their cable operator.

Altice USA — which put Cablevision Systems’ WiFi-only mobile play, Freewheel, out to pasture when it bought the Bethpage, N.Y.-based cable company shortly after its 2015 launch — is on track to deploy its own consumer wireless service this summer.

According to The Wall Street Journal, which said it spoke to unnamed company sources, the service will likely be called Altice Mobile and will be bargain priced somewhere between $20 to $30 a month.

That price undercuts roughly by half the base mobile plan for Sprint, from which Altice leases 4G LTE network resources via a mobile virtual network operator (MVNO) agreement signed in 2017.

It’s unclear at this point if that price applies to an unlimited plan or a “by-the-Gig” data scheme that is used by Comcast and Charter Communications in their respective already launched MVNO-based mobile services. Comcast, for example, offers customers the opportunity to structure their mobile plan in $12-per-Gigabyte increments. (That, of course, is a bargain for minimalist users who consume very little data on the mobile network.) Altice USA did not respond to a request for comment by press time.

Also unclear: Can Altice make money on bundling mobile plans using another company’s network?

Not a Cash Cow

So far, it doesn’t appear that mobile has generated a ton of revenue for either Comcast or Charter, both of which have MVNO agreements with Verizon Communications, and also collaborate on technology and business plans for their services.

Comcast said Xfinity Mobile, which launched back in early 2017, generated $225 million in revenue in the first quarter, up from $185 million in Q1 2018. Comcast ended the January-March period with 1.4 million Xfinity Mobile customer lines, up from 577,000 the Q1 prior.

Charter, which launched Spectrum Mobile last year, said it now has 310,000 wireless lines in the market, after adding 176,000 in the first quarter.

Charter hasn’t disclosed revenue figures for its nascent mobile service, but chief financial officer Christopher Winfrey did say during the operator’s Q1 call that “mobile is ramping nicely and the early results of this product launch remain promising.”

This growth is occurring in a saturated U.S. wireless market, where the big incumbents, Verizon, AT&T, T-Mobile and Sprint are engaged in an aggressive promotional war for customer growth.

Analysts, however, don’t seem impressed by the market infiltration for either Xfinity Mobile or Spectrum Mobile.

“It should be clear by this point that the current [MVNO] deal is a money-loser for the cable operators; it’s not profitable and it likely never will be,” MoffettNathanson principal and senior analyst Craig Moffett wrote in a recent report.

Moffett’s issues stem from the cost of the MVNO agreement, which were supposed to be offset by the offloading of mobile data traffic to the respective Comcast and Charter WiFi networks. With both cable companies pricing their respective unlimited plans at $45 per line, the analyst estimates that a customer using 8 Gigabytes a month generates around $40 in network leasing costs.

“Throw in, say, another $5 per month for voice, and unlimited customers are already underwater even before customer service, customer acquisition costs and [selling, general and administrative expenses],” Moffett said.

As for the WiFi offloading plan, he added, “Cable’s out-of-home WiFi network is a bust; the industry stopped expanding it years ago after it became clear that it was never going to provide a robust out-of-home user experience.”

For their part, both Comcast and Charter have touted the value of their mobile services as churn busters — yet another reason for customers to be tied to the wireline internet and TV bundle. “Churn reduction arguments are nice,” Moffett said, “but they’re really just tiebreakers.”

So into this market comes Altice USA, with 3.3 million video customers and 4.1 million internet customers. It has what it believes to be an edge: owner’s economics on the Sprint network. Partial owner’s economics, anyway.

Under the agreement signed with Sprint, Sprint can build as many small cells as it wants on Altice’s network to, among other reasons, expand its 5G wherewithal. Sprint doesn’t have to pay any lease or backhaul fees, only for the hardware and construction costs. Altice, meanwhile, incurs no costs when it uses those small cells to support its mobile service.

Speaking recently about what he calls an “infrastructure-based MVNO,” Altice USA CEO Dexter Goei said Sprint has already deployed around 19,000 small cells on its network.

“We have relatively attractive wholesale economics compared to other MVNOs,” Goei noted on Altice’s May 2 first-quarter earnings call. “Our core network infrastructure is ready to go, giving us full access control over the customer experience and allows us to better manage traffic.”

Small Cells Save on Costs

Indeed, the more small cells that are added, the more Altice’s MVNO costs will come down over time. Further, T-Mobile has already agreed not to disrupt the deal if and when it closes on its $26 billion bid to acquire Sprint.

“It’s a rather elegant solution,” Moffett said. “Sprint gets a huge cost and time-to-market advantage versus Verizon, AT&T, and — if the [merger] deal is rejected — T-Mobile. And Altice USA gets an MVNO agreement which gets cheaper and cheaper over time as more and more traffic is carried by their joint small cells.”

Goei added, “We’re doing a similar MVNO price point to other MVNOs out there, and it’s going to be profitable right out of the box.”

The U.S. Justice Department reportedly talked to representatives from Comcast and Charter this week about filling the void of the fourth major U.S. wireless carrier that would be created if T-Mobile and Sprint are allowed to merge.

According to Bloomberg, as a condition for approving T-Mobile’s $26.5 billion acquisition bid for Sprint, the DOJ wants the Nos. 3 & 4 wireless companies to divest wireless spectrum and enable a fourth U.S. major wireless carrier.

For their part, Comcast and Charter both have nascent mobile services through MVNO agreements with Verizon. And the cable companies collaborate on wireless business planning and technology. As of the end of the first quarter, Comcast reported 1.4 million wireless lines in deployment while Charter said it had around 310,000.

Analysts, however, suspect that after paying network leasing bills to Verizon, neither operator makes money on their respective mobile service. Bloomberg said the companies are interested in acquiring spectrum to possibly create—perhaps jointly—their own wireless network. The companies are also interested in discussing a more favorable MVNO deal, as well as any network equipment or customers that might be divested by T-Mobile and Sprint in order to facilitate approval. 

A handful of Democratic senators have asked FCC chair Ajit Pai to put the new T-Mobile-Sprint conditions offered up this week out for public comment before voting on the deal.  

Pai said this week that the conditions, including spinning off Boost Mobile, holding down prices and pledging 5G buildouts, made the deal in the public interest and he planned to circulate an order approving it, which his fellow Republican commissioners, comprising a majority, indicated they would support. 

In the letter, the senators, who opposed the deal as previously constituted, said they still oppose it and asked both the FCC and Justice Department to reject it.  

Related: FCC Poised to OK T-Mobile-Sprint Merger

They cited the behavioral conditions, but made no mention of the Boost spin-off. 

They said the conditions are mostly unrelated to merger-specific harms and thus the type of condition the chairman has criticized in the past. They also said they were worried about the process and that the conditions appeared without public input or "visibility." 

As a result, they said, the FCC should give the public 30 days to weigh in on the conditions, though they did not need that long to say they don't think they make the deal palatable.  

Signing on to the letter were Sens. Tom Udall (D-N.M.), Amy Klobuchar (D-Minn.), Richard Blumenthal (D-Conn.), Elizabeth Warren and Ed Markey (both D-Mass.) and Cory Booker (D-N.J.). 

Sprint stock soared more than 27% ($1.72 each) in early trading Monday after the country’s top federal regulator said its pending merger with T-Mobile should win approval.

Sprint stock was priced as high as $7.90 per share on Monday, up $1.72 each or 27.8% in early morning trading. The stock managed to maintain much of that momentum as the day progressed -- it was priced at $7.17 each, up 99 cents each or 16%, at 3:01 p.m. on May 20 -- but lost some of the ground by the end of the day, closing at $6.95 each, up 77 cents or 12.5% per share.

T-Mobile stock, up as much as 7.4% earlier in the day, closed at $78.29 per share on May 20, up $2.92 each, or about 4%.

T-Mobile and Sprint first announced their $26 billion merger in April 2018. 

Related: FCC's Carr Will Vote to Approve T-Mobile/Sprint 

On CNBC’s “Squawk Alley” Monday, FCC commissioner Brendan Carr also threw his support in favor of the deal. 

Carr told CNBC that in a filing with the commission this morning, T-Mobile walked through its plans for the merger.

“I think one thing that stood out from that filing is we’re going to see 97% of the country covered with 5G within three years,” Carr told CNBC. “When you think about U.S. leadership in 5G, one of our big goals is make sure every single community can benefit, not just the biggest cities. And this combination through that enforceable mechanism that’s in that detailed filing is going to put us on that path.”

Foes of the T-Mobile-Sprint merger were ripping FCC Chairman Ajit Pai for announcing all the reasons he would be voting for the deal, but there were fans of the move as well.

The chairman said Monday (May 20) he would be voting for the deal after the companies offered up 5G buildout conditions, no price increases for three years, spinning off T-Mobile's largest prepaid wireless service subsidiary, and more.

The Competitive Enterprise Institute (CEI) Center was one of them, though it would have preferred fewer conditions and no Boost spin-off.

Associate Director of CEI’s Center for Technology and Innovation Jessica Melugin said:

“CEI applauds FCC Chairman Ajit Pai and commissioner Brendan Carr for announcing their support for the proposed merger between Sprint and T-Mobile," said jessica Melugin, associate director of CEI's Center for Technology and Innovation. "While CEI has urged regulators to let the merger proceed without market-distorting conditions, like the requirement that Sprint divest itself of Boost Mobile, the FCC’s approval appears to be a relatively clean deal and could have been much, much worse.

“Allowing the Sprint-T-Mobile merger to proceed will provide numerous benefits to consumers and our economy and will let the market work to provide private capital for 5G deployment," said melugin. "CEI hopes the FCC and the Department of Justice will move swiftly to approve this win for American consumers.”

"T-Mobile and Sprint have made significant commitments to advance 5G in the United States," said Ken Cuccinelli, director of the Regulatory Action Center at the Freedomworks Foundation. "This deal will give America an advantage in the race with China to build a 5G infrastructure and increase access to high-speed broadband that will benefit urban and rural communities alike, promote competition, and create jobs. We applaud Chairman Ajit Pai and the FCC for taking steps to approve the merger."

It still must be voted by the full commission and approved by the Justice Department, but with Brendan Carr on board (he announced his support not long after the chairman), Pai just needs the vote of the other Republican, Michael O'Rielly, and the Boost Mobile spin-off could well have been the key to a Justice decision the deal didn't need blocking.