DOJ Supports Giving Dish Until April 1 to Buy T-Mobile 800 MHz Spectrum
DOJ sided with Dish Network, against T-Mobile, over whether Dish should get more time to buy 800 MHz spectrum, filing Tuesday in the U.S. District Court for the District of Columbia, which is handling T-Mobile’s buy of Sprint (see 2308170065). The government supports giving Dish until April 1 to buy the spectrum, or pay a $72 million fee for walking away from the deal (see 1907260071). Dish asked for an extension through June 30.
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Industry officials said the filing wasn’t a surprise since DOJ has been heavily invested in the theory that Dish will become a fourth national carrier to compete with T-Mobile, Verizon and AT&T. The court will likely “give the DOJ filing a great deal of deference in evaluating the request in light of the purpose of the Final Judgment,” emailed New Street’s Blair Levin.
“We are pleased the DOJ’s filing reaffirmed DISH’s role as the nation’s fourth facilities-based wireless carrier and recognized the importance of the 800 MHz spectrum in enhancing DISH’s ability to compete,” a Dish spokesperson emailed.
T-Mobile didn’t comment Tuesday. T-Mobile and parent Deutsche Telekom told the court last month (see 2308280055) the cost to keep and maintain the 800 MHz licenses for an additional 10 months would be “at least $215.7 million, including about $6.3 million of direct expenses for network and equipment and about $209.4 million for T-Mobile’s cost of capital.”
“The parties have represented to the United States that they are engaged in a commercial dispute regarding this option,” the pleading said: “T-Mobile has asserted that DISH has lost its opportunity to exercise the option and that the spectrum should be sold pursuant to an auction as soon as possible.”
DOJ sought a modification of the final judgment permitting T-Mobile’s buy of Sprint. “This order’s complexity, requiring ongoing supervision and including myriad entanglements between the divestiture buyer and the merged firm, increases the risk that the consent decree may fail to protect the competition lost by the elimination of Sprint as a competitor,” it said.
The government said the “critical facts are straightforward” in the case. “DISH is more likely to succeed as a national carrier if it obtains the 800 MHz spectrum that is the subject of the dispute,” the filing said: “The extraordinary and unforeseen macroeconomic events over the last three years justify an order modification. … DISH has not said whether it will be able to exercise the option at any time.” Even if the court denied the extension, it would likely take T-Mobile months to sell the spectrum and have the sale approved by the FCC, the pleading notes. “T-Mobile will not be harmed so long as it can begin to concurrently explore alternative purchasers in the interim,” it said.
Dish agreed to waive any right to seek additional extensions “so that the spectrum does not lie fallow for an unknown period,” the government said. It also “represented to the United States that it will waive its right to enforce the non-solicitation clause in the License Purchase Agreement so that T-Mobile can concurrently conduct the auction process.”