clock menu more-arrow no yes

Filed under:

FCC chief reportedly skeptical on T-Mobile-Sprint merger

New, 36 comments
son hesse softbank sprint stock 1020
son hesse softbank sprint stock 1020

Sprint chairman Masayoshi Son and CEO Dan Hesse.

Federal Communications Commission (FCC) chairman Tom Wheeler has reportedly echoed concerns over the potential merger of Sprint and T-Mobile. Reuters says that Sprint's chairman Masayoshi Son and CEO Dan Hesse held talks with the commission last week to discuss the company's plans to launch an acquisition bid for T-Mobile. At the meeting, Wheeler was apparently skeptical about the chances of a merger between America's third- and fourth-largest carriers passing regulatory hurdles. This echoes comments made by the both the FCC and Department of Justice (DOJ) over the past year or so, and also matches reports of a similar meeting between Sprint executives and the DOJ last week.

According to Reuters, the purpose of Sprint's recent battery of talks is to implore officials to approach a review of the acquisition bid with open minds. It appears extremely likely that Sprint will launch a bid despite the odds against regulatory approval being stacked against the carrier. If the bid does come through, Sprint and T-Mobile will argue that the acquisition will help the newly merged carriers to compete with industry giants AT&T and Verizon, while the DOJ and FCC currently hold the position that a four-carrier system is important for maintaining a competitive market for consumers. The FCC and DOJ have the power to block an acquisition if they believe it's not of benefit to competition, and, depending on the terms of the potential bid, that could cost Sprint a lot of money in break-up fees.