On Tuesday, the Federal Communications Commission (“FCC”) approved the proposed merger of cellular service providers T-Mobile USA and MetroPCS.  In its written opinion and order, the FCC’s Wireless Bureau concluded that the proposed merger would benefit competition in the wireless market by, among other things, providing the combined company with greater spectrum resources for its LTE network.  The Bureau’s action underscores the value that federal policymakers place on maintaining four national carriers―an issue that came to the forefront when regulators rejected the bid of the 2nd-largest carrier, AT&T, to acquire T-Mobile in December 2011.

After reviewing the relevant product and geographic markets, the FCC observed that the merger of T-Mobile and MetroPCS could create limited competitive harms in a few local geographic markets.  However, those harms were outweighed by the public interest benefits likely to accrue from the merger, including “the expansion of the MetroPCS brand into new geographical markets, the development of a more robust, national network, improved quality of service,” and the strengthening of T-Mobile’s “ability to compete in the mobile broadband services market.”  The agency was persuaded that the merger would permit existing MetroPCS customers access to a larger network (and bring the MetroPCS brand to markets in which it does not currently compete).  The merger also would give T-Mobile customers better service quality — particularly in major metropolitan markets, where the combination of the T-Mobile and MetroPCS networks would bolster service in areas where the T-Mobile network was already at capacity. 

In addition, the agency emphasized that the merger could give the combined entity the resources it needed to facilitate the deployment of a next-generation LTE network, bolstering competition in that market.  Because the two companies would merge their network assets and spectrum, the FCC concluded the combined entity “would provide for a broader, deeper, and faster LTE deployment than either company could accomplish on its own.”

FCC Chairman Julius Genachowski issued a short statement on the merger approval, noting the decision reflected the agency’s focus on accelerating broadband built-out and promoting competition in that space.  Genachowski also noted that “challenges remain,” including “the need to unleash even more spectrum for mobile broadband and continuing to promote competition and protect consumers.”

The Department of Justice approved the merger earlier in March.  The parties await approval of the U.S. Committee on Foreign Investment in the United States, an interagency committee that has a role in light of T-Mobile’s foreign (German) ownership. But this is not expected to be an obstacle, as the national security agencies (which also are members of CFIUS) already have signaled their approval as part of the FCC review process.  The only other major step before the companies can combine is a vote of MetroPCS shareholders, now scheduled for April 12.

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Photo of Cort Lannin Cort Lannin

Cortlin Lannin is a litigator who defends clients in high-stakes complex matters, specializing in class action cases implicating consumer protection and competition claims. He approaches his matters with efficiency and creativity, developing thoughtful strategies to resolve cases and investigations early and on favorable…

Cortlin Lannin is a litigator who defends clients in high-stakes complex matters, specializing in class action cases implicating consumer protection and competition claims. He approaches his matters with efficiency and creativity, developing thoughtful strategies to resolve cases and investigations early and on favorable terms.

On behalf of a range of clients in the food, beverage, and consumer packaged goods industries, Cort has navigated pre-complaint disputes and defended multiple class actions implicating deceptive and false advertising practices under California’s UCL, FAL, and CLRA, and other states’ false advertising and unfair competition laws. Cort also has a depth of experience with competition matters, having represented clients in civil class action litigation, non-public governmental investigations of both the civil and criminal variety, and internal investigations. He has had a lead role in cases and investigations implicating the high tech industry, alleged “no-poach” agreements, and price-fixing and similar cartel conduct. He is also a leader in the antitrust bar and the recent chair of the Antitrust Section of the Bar Association of San Francisco.

Cort is a co-chair of Covington’s LGBT+ Affinity Group and is deeply involved in the firm’s efforts to recruit, mentor, and promote diverse attorneys, including LGBT+ attorneys.

Prior to joining Covington, Cort was a national political consultant who specialized in polling and focus group research. He leverages this research background in his litigation practice, particularly in defending consumer cases.