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.” 

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.”

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.”

April 1 will be no joke for the telecom industry. That’s the day T-Mobile-Sprint is scheduled to complete a two-year odyssey to get its $26 billion merger across the finish line, creating a more competitive and deeper-pocketed No. 3 wireless carrier. But just as the New T-Mobile, as the combined company is tentatively called, bulks up to an estimated 100 million wireless customers, other players are beginning to emerge.

Dish Network is poised to become the fourth-largest U.S. wireless carrier, based on the asset it has agreed to buy from T-Mobile-Sprint as a condition of federal regulatory approval of the latter’s merger. Shortly after T-Mobile-Sprint closes its deal, Dish will buy 9.3 million former Boost Mobile and Virgin Mobile prepaid wireless subscribers. Dish will also gain access to the new T-Mobile network via a seven-year mobile virtual network operator (MVNO) deal, and will spend another $3.4 billion to purchase spectrum from the new entity over three years.

On the sidelines sits cable, which after three failed attempts to break into the wireless business over the past two decades seems to have found the right elements within the past two years. Comcast’s Xfinity Mobile, launched in 2017, crossed 2.05 million subscribers in 2019 and, according to some analysts, is on a path to more than double that base in the next four years. Typically conservative Comcast said it expects wireless to become cash-flow positive by the end of 2021.

Charter Communications, which launched Spectrum Mobile in September 2018, added more than 1 million customers in the past 18 months and expects to be cash-flow positive in 2021.

Those new and stronger players will all have to compete with wireless industry behemoths AT&T (166 million wireless subscribers) and Verizon Communications (120 million wireless customers). Here’s a closer look at how they are expected to stack up.

New T-Mobile

T-Mobile proposed its merger with Sprint in April 2018, a deal it said would allow it to better compete with AT&T and Verizon and introduce new products and services to underserved markets. Along the way, the companies had to clear hurdles set up by a group of state attorneys general, which claimed the merger would result in higher prices for consumers. T-Mobile-Sprint was cleared for takeoff in February, after a federal judge ruled the combination was in the public interest. While other states have said they won’t appeal, including New York state, California Attorney General Xavier Becerra has said he would keep his options open. Most observers believe T-Mobile-Sprint can go through with the closing no matter what Becerra decides.

Just what the new T-Mobile will do after the close is anyone’s guess. But the company has made at least one thing clear: It’s going after cable.

“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,” T-Mobile CEO John Legere said in a press release shortly after the federal court decision was announced. “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 [AT&T and Verizon] and Big Cable — we are coming for you … and you haven’t seen anything yet!”

Whatever T-Mobile does in the video space will likely involve its 2018 purchase of Layer3 TV. T-Mobile spent about $325 million for over-the-top multichannel video programming distributor (MVPD) Layer3 TV and launched TVision Home in eight markets in April of 2019. Layer3 has high programming costs (20% to 30% higher than its peers, T-Mobile has said in federal filings) which has made launching the video service difficult.

Legere has said he will step down as CEO in May, after the deal closes, replaced by T-Mobile chief operating officer Mike Sievert. With the merger behind it, Sievert said the new T-Mobile will be able to focus on providing stronger service and expanding its 5G footprint.

T-Mobile-Sprint has pledged 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.

Dish Network

Dish has agreed to purchase T-Mobile-Sprint’s prepaid wireless businesses (Boost Mobile and Virgin Mobile) for $1.4 billion, adding about 9.3 million subscribers shortly after the larger merger closes. Dish will also spend another $3.6 billion on T-Mobile-owned 800 MHz wireless spectrum over the next three years, and will have its own MVNO agreement with the combined company for seven years.

Dish has been relatively quiet about its plans for the wireless service — it needs to build a 5G-capable network available to 20% of the country by 2022, expanding to 70% of the U.S. by June 2023, as per federal mandate. In the past, Dish has spoken of using its wireless capability to accelerate the Internet of Things, but lately the focus has been more on 5G, especially the ability to bring that technology to rural America. Dish has said it expects to spend about $10 billion to build out the 5G network, a figure some analysts have said is too low.

The biggest short-term benefit of the deal for Dish is that it gives it more time to build out its wireless network with its existing spectrum. It had been facing a March 2020 deadline for its network to reach 20% of the country. Now, it has two more years to reach that milestone. The addition of the Boost Mobile and Virgin Mobile subscribers also provides a pool of potential customers for its postpaid business. While prepaid customers churn at a 5% rate, Dish has said migrating those customers over to a more reliable Dish-operated network — both via the T-Mobile MVNO and whatever it builds out — should reduce that churn substantially.

On Dish’s Q4 earnings conference call, founder and chairman Charlie Ergen was reluctant to reveal too much of the company’s wireless strategy, but said the build for 5G service will be on a city-by-city basis.

“There’s obviously going to be some cities that are more interested in getting 5G quickly,” Ergen said. “And those cities that want to work with us will probably get first priority. And then, obviously, when we build out a city, we can have owner economics there. So we don’t have to build — we’re probably not going to build two towers in every city. We’ll build that city by city, and complete a city before we move to the next city.”

Xfinity Mobile

Comcast launched Xfinity Mobile in 2017. Two years later, the mobile service has 2.05 million customers and is evolving from its initial purpose as a retention tool for broadband to becoming a profit center. Comcast chief financial officer Michael Cavanagh has said wireless is expected to be profitable by 2021.

The success of the wireless product can be traced to one tenet: Keep it simple, Comcast senior VP of innovation and customer value proposition Rui Costa said.

“The starting point has always been our connectivity business,” Costa said. “The success attributed to wireless is how well we position it as an additional benefit of our connectivity value proposition. The way we’ve introduced this, as the missing piece of our broadband, has been paramount to the success of this.”

The way Comcast has introduced wireless this time around also is different, Costa said, in that the focus is on the overall customer experience.

“Our product is the experience and the experience is our product,” he said, adding that Comcast has purposefully kept the mobile product as simple as possible, whether it be flexible pricing plans, different data options and even a pay-as-you-go option. The idea is to offer consumers choice without bombarding them with options that are difficult to understand.

Wireless has also proven to be an incentive for customers to keep their broadband service. Like its cable peer Charter Communications, Comcast wireless customers are required to subscribe to broadband.

In 2019, Comcast Cable added 1.4 million broadband customers, its best performance in 12 years. While there are other factors associated with that growth, including the speedy demise of telco digital subscriber line service, at least some of it can be traced to wireless stickiness.

Costa didn’t want to take credit for the rise of broadband, saying there are a lot of factors that could be attributed to its success. But wireless is becoming an increasingly important component of the overall connectivity value proposition, he said.

“The success has been the proof of how well we’re telling the story to consumers and how valuable that has become to them,” Costa said.

Those subscriber increases have helped substantially reduce the mobile unit’s EBITDA, or cash flow, losses. Comcast cut its wireless EBITDA losses by nearly half in 2019, to $402 million from $746 million in the prior year. In Q4 alone, the unit’s EBITDA losses improved by 40%, prompting Cavanagh to predict wireless would be cash-flow positive for the full year of 2021.

Analysts see strong growth ahead for the wireless product: Moffett has estimated that Xfinity Mobile will more than double its subscribers to 5.7 million by 2024.

“The strategy has been, and is and will be, how can we use mobile as a benefit back to our broadband and connectivity business?” Costa said. “It is working because we see a benefit translated in many ways — churn, and attachment of other products. The other is the halo that has been created on the back of this new way of doing business with us.”

Spectrum Mobile

Charter launched Spectrum Mobile in September 2018 and in a little more than a year grew its wireless customer base from virtually nothing to 1.1 million. According to chief mobile officer Danny Bowman, Charter’s recipe for wireless success can be summed up in two words: simplicity and speed.

“We’ve integrated mobile into our core business,” Bowman said. “We introduce mobile into every possible transaction, whether that’s inbound sales or someone walking into our stores. The channels themselves have built a lot of mobile muscle memory and it’s just become part of what we do.”

Charter was also expected on March 6 to launch 5G in 14 cities via its Verizon MVNO. (Comcast also has said it would begin offering 5G handsets on March 6.) Speeds of the service will range from 700 Megabits per second to 1 Gigabit per second. According to Bowman, 5G will be included at no extra charge to Spectrum Mobile’s $45 per month unlimited data customers.

“We already provide the fastest mobile experience from coast to coast,” Bowman said. “This is just another proof point that we’re always going to have the fastest mobile experience for our customers. We’re keeping it super simple. We’re not creating some high premium rate plan that you have to buy. I think it’ll be easy for our channels to sell. You pick a 5G device, you get a $45 rate plan; you pick a 4G device, you get a $45 rate plan.”

Also helping with sales of the 5G product, as well Charter’s other offerings, are the more than 350 Spectrum retail stores with mobile service across the country. More are planned, Bowman said, adding the stores have played a key role in mobile’s success.

The stores are just another choice on a long list of options customers have for buying mobile service, including online, or by making a phone call and having a device or a SIM card shipped to their home.

“We’ve made it really easy for a customer to do business with us,” Bowman said. “Whether you want to say, call, click or visit, we’ve made it very simple and we can be very disruptive because of how we support our customers and what channel they want to use.”

Altice Mobile

Altice USA, the newest cable player on the wireless block, launched its mobile service in September 2019 and finished the year with about 69,000 customers, an initial pace the company claimed was twice that of its peers. The smallest of the three cable players, Altice — with about 4.2 million broadband customers, compared to 28.6 million for Comcast and 25 million for Charter — also has the most aggressive offering. Altice Mobile launched at a price point of $20 per line for life, less than half the $45 per line Comcast and Charter were charging. Altice Mobile has since said it ended that $20 promotion in March, increasing the price to $30 per line for new customers (legacy customers will still pay $20 for as long as they have the service). Still, even at the higher price point, Altice Mobile is cable’s best wireless bargain.

Altice’s ability to keep its prices so low is tied in part to its MVNO deal with Sprint (now T-Mobile). Altice USA CEO Dexter Goei has said its original MVNO deal will remain intact after the merger.

Analysts have pointed to Altice USA’s MVNO as the gold standard for such deals among cable operators. Based on the structure of that agreement, Altice pays less as more and more traffic moves off the MVNO to Altice’s network. Given the architecture of the Altice network, that won’t be as hard as it seems.

Under Altice’s deal, Sprint is allowed to build small cells on Altice’s network. Sprint pays nothing to Altice aside from construction costs. In turn, the cable company gets to ride on those small cells for free. The more cells there are, the lower the cost of the MVNO.

After the T-Mobile-Sprint close, Altice will have access to what Moffett called “a best-in-class network at a disruptively low price. It seems a foregone conclusion that they will attract subscribers. They already believe they can offload enough traffic from the network that they will be profitable even at super-low prices.”

Altice USA added about 69,000 mobile customers in Q4 — about twice the quarterly pace of its peers’ initial offerings — and is expected to end 2024 with 876,000 customers, according to MoffettNathanson, or about 17% of its total broadband base, inline with its larger peers.

At the Morgan Stanley Technology, Media and Telecom conference on March 3, Goei said Altice counts about 100,000 wireless customers, a signup pace about 2.5 times faster than its peers at launch.

Altice USA also will have access to 5G tech through its T-Mobile-Sprint MVNO, Goei added. While 5G could be perceived as a threat to Altice’s own wireless business, Goei said he views it more as an opportunity, especially since the technology is expected to be deployed over time.

“There’s obviously different strategies amongst different operators, but by and large, it’s an opportunity for MVPDs to work with wireless operators, particularly those who want a small cell,” Goei said. “And for those who want to go deep into the residential neighborhoods with fiber, good luck, have fun.”

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. 

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."

The prospect that "third parties [could] undercut...federal enforcement decisions" - such as the pending T-Mobile/Sprint merger - is one of the greatest concerns in the new antitrust environment, Assistant Attorney General Makan Delrahim explained in remarks to the monthly luncheon of the Media Institute in Washington on Wednesday (Feb. 5). He reminded the policy-centric audience that the Federal Communications Commission, the Department of Justice and many states approved the merger last year. But then attorneys general from 10 states and the District of Columbia sued to prevent the alliance; a decision is still pending.

"So, we have two specialized federal agencies reviewing the T-Mobile/Sprint transaction" and deeming it legal, Delrahim said. "Yet, we have a minority of states and the District of Columbia trying to undo that relief across the entire country. If you find this situation odd, you’re not alone."

"We often work closely with our state attorneys general partners in enforcement actions," he continued. "Here, however, a small group of state attorneys general did not reach consensus." Delrahim contended that such actions are "incompatible with the orderly operation of our antitrust merger laws and telecommunications regulations. It creates the risk that a small subset of states, or even perhaps just one, could undermine beneficial transactions and settlements nationwide."

Delrahim fretted, "That any state, or even any individual, can undo the nationwide relief secured by the federal government and approved by a federal court."

"That would wreak havoc on parties’ ability to merge, on the government’s ability to settle cases, and cause real uncertainty in the market for mergers and acquisitions," he added, noting that "Permitting states to undermine federal enforcement also would be contrary to congressional intent."

The AAG's passionate example emphasized the core of his remarks, which focused on DoJ's efforts to "reform" and "modernize" the Antitrust Division's merger review process.

"As a benchmark to measure success, we committed that we would aim to resolve most merger investigations within six months of filing," Delrahim said. After about 18 months of efforts, he said current initial merger reviews take about 5.4 months, and for cases that involve any challenge "the average time to notification is 5.7 months."

Steering Clear of Tech Examination and Media Issues

Delrahim ducked questions about DoJ's broad antitrust investigation of major digital platform firms (Google, Amazon, Apple and Facebook), announced in July. Initially, the agency expected to complete that probe by the end of 2019.

Early this week, Delrahim was recused from the Google portion that probe because of a potential conflict of interest. Before joining DoJ, Delrahim in private practice represented Google in its 2007 acquisition of DoubleClick, an ad-tech firm.

Separately, Delrahim touched briefly on the long-pending examination of the 1941 consent decrees affecting BMI and ASCAP music licensing agreements. Last year, he said that DoJ expected to decide by the end of 2019 whether those restrictions should be amended, eliminated or maintained as is.

On Wednesday he would only say that the agency's review is not comparable to its November 2019 termination of the half-century-old Paramount consent decree affecting studio ownership of exhibition facilities.

Federal Communications Commission chairman Ajit Pai wasn’t talking about the agency’s investigation into Sprint for what he has called outrageous conduct related to its Lifeline broadband subsidies. That is because the FCC’s Enforcement Bureau is investigating the allegation, which stemmed from a probe by the Oregon Public Utility Commission.

But others were talking about it, including one powerful union that’s been no fan of the deal from the outset and which called for a timeout on the FCC’s vote to approve the T-Mobile-Sprint merger — the Justice Department has already signed off — expected any time now.

“The FCC must pause the merger review pending an investigation into Sprint’s fraud and abuse of the Lifeline program,” Communications Workers of America telecom policy director Debbie Goldman said. “This fraud calls into question the character of Sprint as a licensee. FCC precedent is clear that a company cannot sell a license until the character issue is investigated and resolved.”

Sprint said the subsidy matter was a mistake that has been corrected, and has volunteered to reimburse the government for the gains the FCC suggests were ill-gotten. The FCC does like to clear up legal overhang before approving a merger, so, it did leave the Wire pondering whether the investigation raises fitness questions the FCC needs to address.

MoffetNathanson principal and senior analyst Craig Moffett said the investigation could actually cut either way.

“On the one hand, it is certainly a blow to Sprint’s credibility, and that’s an obvious negative for the merger,” Moffett told The Wire. “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 stock plunged more than 7% on Tuesday after a group of states Attorneys General filed a federal suit to block the wireless company’s pending merger with T-Mobile US, arguing that the $26 billion deal would drive up cellular service prices.

Sprint stock fell as much as 7.3% on Tuesday to $6.48 per share as news of the suit, filed in U.S. District Court for the Southern District of New York, came out. The suit was led by New York Attorney General Letitia James and California Attorney General Xavier Becerra, who were joined by AGs from Colorado, the District of Columbia, Maryland, Michigan, Mississippi, Connecticut, Virginia and Wisconsin.

Sprint stock closed at $6.58 each on June 11, down 5.9%, or 41 cents per share. T-Mobile shares closed at $75.46, down 1.6%, or $1.21 each.

“When it comes to corporate power, bigger isn’t always better,” said New York AG James said in a press release. “The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country. That’s why we are going to court to stop this merger and protect our consumers, because this is exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”

The merger would join the third and fourth largest wireless companies in the country, eliminating at least one major competitor, which in the past has been a hard regulatory hurdle to clear. But the companies were encouraged after Federal Communications Commission chairman Ajit Pai announced his support of the deal after the two parties proposed divesting its Boost Mobile pre-paid wireless subsidiary and pledging to build out 5G service to most of the country. 

“Although T-Mobile and Sprint may be promising faster, better, and cheaper service with this merger, the evidence weighs against it,” California AG Becerra said in the press release. “This merger would hurt the most vulnerable Californians and result in a compressed market with fewer choices and higher prices. Today, along with New York and eight other partner states, we’ve filed a lawsuit to block this merger and protect the residents of our state.”

Sprint and T-Mobile have been down this road before. The two scrapped plans for a merger in 2014 after it became clear that it would not receive approval from Obama administration officials. The two tried it again in November 2017, but balked after they couldn’t agree on control issues. But by May of 2018, both were back at the negotiating table.

Opposition to the deal seems to be split across party lines. The Attorneys General that are part of the most recent suit are all Democrats. Earlier Tuesday, Fox Business Network correspondent Charlie Gasparino reported that T-Mobile CEO John Legere met Monday with federal officials and that “it looks like this thing is moving forward in terms of potentially approving.”

According to a report in the Wall Street Journal, Sprint and T-Mobile can still go through with the merger despite the states’ objections as long as they win federal approval, but there would be a cloud of legal uncertainty over the deal’s future. 

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.”