Texas Joins N.Y. Lawsuit to Block T-Mobile’s Sprint Deal

(Bloomberg) -- Texas is joining the fight to block T-Mobile USA Inc.'s acquisition of Sprint Corp., dealing a blow to the companies less than a week after their tie-up was cleared by the U.S. antitrust regulator.

Texas Attorney General Ken Paxton, a conservative Republican who is typically in lockstep with the Trump administration, will co-lead the antitrust suit with his Democratic counterparts in California and New York, a lawyer for the states said at a hearing Thursday in Manhattan federal court.

The lawsuit, filed in June by more than a dozen states and the District of Columbia, had involved only Democratic attorneys general who usually clash in court with their red-state rivals.

“We welcome Texas's resolve to block this anticompetitive merger,” New York Attorney General Letitia James said in an emailed statement. “We are more confident than ever that enforcing our antitrust laws -- as they were meant to be enforced -- is the best way to protect competition in the mobile marketplace.”

California Attorney General Xavier Becerra echoed James's remarks, calling the move “welcome news.”

The beefed-up coalition gives a boost to the states' lawsuit six days after T-Mobile and Sprint agreed to sell assets to Dish Network Corp. to win approval from the U.S. Justice Department's antitrust division.

When that settlement was announced, the states vowed to continue their antitrust suit, saying the Dish deal, intended to create a new rival in the market and preserve competition, was a “fig leaf” that wouldn't really help consumers.

“While we appreciate the time and effort that went into the agreement between the parties and the U.S. Department of Justice, the Texas attorney general has an independent obligation to protect Texas consumers,” Paxton said in his statement. “We do not anticipate that the proposed new entrant will replace the competitive role of Sprint anytime soon.”

U.S. Magistrate Judge Robert Lehrburger concluded Thursday's hearing by granting a request by the states to move the trial to December from October. He ordered T-Mobile and Sprint to submit their employees to 140 hours of depositions, more than twice what the companies said was warranted.

T-Mobile and Sprint have promised to deploy a 5G network that would cover 97% of the U.S. population within three years and 99% within six years, reshaping the industry.

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Jeffrey

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