California drops efforts to challenge T-Mobile, Sprint merger

California Attorney General Xavier Becerra (D) on Wednesday announced that he will not appeal a federal court decision in favor of the controversial T-Mobile-Sprint merger, formally ending the legal challenge from a broad coalition of state attorneys general alleging the $26 billion deal was illegal and harmful to consumers.

In a settlement with California, T-Mobile agreed to offer services to millions of low-income Californians and create thousands of new jobs in the the country’s most populous state.

The settlement resolves one of the final barriers to the T-Mobile-Sprint merger, which could clear by April 1. Becerra previously worked alongside New York Attorney General Letitia James (D) to challenge the merger, which they said would result in thousands of layoffs and higher prices for mobile carrier customers.

But last month, a federal judge in New York ruled against the coalition of 15 attorneys general, clearing the final hurdle for two of the largest telecom companies in the U.S. to combine. 

“Our coalition vigorously challenged the T-Mobile/Sprint telecom merger over concerns that it would thwart competition and leave consumers with higher prices,” Becerra said in a statement on Wednesday. “We took our case to court to ensure that, no matter its outcome, we’d protect innovation and fair prices.”

“Though the district court approved the merger, its decision also made clear to companies that local markets matter in assessing the competitive impact of a merger and that no one should underestimate the role of state enforcers,” Becerra said. “Most importantly, today’s settlement locks in new jobs and protections for vulnerable consumers, and it extends access to telecom services for our most underserved and rural communities.”

Under the settlement, the new T-Mobile is required to offer no-cost internet services to 10 million low-income households in California and extend T-Mobile plans in the state.

James, who co-led the coalition of attorneys general, has already said she will not appeal the federal judge’s decision. In February, she called the decision a “loss for every American.” 

Judge Victor Marrero of the U.S. District Court in Manhattan, a Clinton appointee, wrote in February that the proposed merger between two of the four major telecom companies in the U.S. is not “reasonably likely to substantially lessen competition,” striking down the states’ central argument.

The combined T-Mobile-Sprint will boast a regular monthly subscriber base of about 80 million, a significant reshaping of the telecom industry landscape.