October 21, 2019 / 3:27 PM / 2 months ago

Colorado abandons legal effort to stop Sprint, T-Mobile merger

WASHINGTON (Reuters) - Colorado became on Monday the second state to drop out of an effort by state attorneys general led by New York and California to stop T-Mobile US Inc’s $26 billion merger with Sprint Corp.

FILE PHOTO: A smartphone with Sprint logo are seen in front of a screen projection of T-mobile logo, in this picture illustration taken April 30, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

Colorado struck a deal with T-Mobile and Dish Network Corp, which is buying assets divested from the merger. In the deal, Dish pledged to bring 2,000 jobs to the state and T-Mobile pledged to deploy the next generation of wireless 5G across much of Colorado, the state attorney general’s office said in a statement.

Colorado is the second state to defect from the lawsuit to stop the merger. Mississippi said on Oct. 9 that it would withdraw from the legal challenge.

This leaves New York, California and the attorneys general of 13 other states and Washington, D.C. headed to court to fight the companies when the trial begins on Dec. 9. With Colorado, 13 states now support the proposed merger.

Under the Justice Department deal to win antitrust approval for the merger, the companies agreed to divest Sprint’s prepaid businesses, including Boost Mobile, to Dish, and provide it with access to 20,000 cell sites and hundreds of retail locations. That deal is worth about $5 billion.

T-Mobile CEO John Legere tweeted that it was “great news” that Colorado would drop off the lawsuit. “CO knows that New T-Mobile will create jobs and deliver 5G to rural areas of the state-and beyond!” he tweeted.

The lawsuit against Sprint and its parent company Softbank Group Corp and T-Mobile and its parent Deutsche Telekom AG argues the deal will lead to higher prices for consumers.

New York Attorney General Letitia James said that the agreement with Colorado did not fix “nationwide harms” created by the merger of the third and fourth largest U.S. wireless carriers.

“We remain committed to challenging this merger, and have continued to develop strong evidence that it is bad for consumers, bad for workers, and bad for innovation,” she said.

Dish said in a statement that Colorado would be among the first 10 states to get Dish 5G broadband. “Today’s settlement with Colorado positions Dish, a company founded in Colorado, to make a transformative impact on the wireless market,” said Dish Chairman Charlie Ergen.

The deal already has approval from the Justice Department while sources say that the Federal Communications Commission has voted to approve the measure. That approval is expected to be made public this month.

Reporting by Diane Bartz; Editing by Chizu Nomiyama and Lisa Shumaker

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