technology

Dish and T-Mobile Combination of Mavericks Could Find U.S. Favor

A combination of satellite-TV provider Dish Network Corp. and T-Mobile US Inc. would probably be viewed favorably by Washington regulators if the companies decide to merge.

The two companies are continuing slow-moving talks since Dish Chief Executive Officer Charlie Ergen made a renewed approach to T-Mobile in September after years of discussions, according to people familiar with the matter. Both sides are still far apart on price and may not reach an agreement, said one of the people.

“You bring together two industry mavericks, and that will in general be viewed positively by antitrust and other officials,” Gene Kimmelman, a former Justice Department official and president of the policy group Public Knowledge, said in an interview.

Regulators have touted T-Mobile as an upstart that injects needed competition into the mobile business, which is dominated by AT&T Inc. and Verizon Communications Inc. The company has added customers with price cuts under Chief Executive Officer John Legere.

Dish, led by co-founder Ergen, has accumulated a $50 billion trove of airwaves in preparation for a mobile-based challenge to the pay-TV industry.

A deal would need approval from the U.S. Justice Department and the Federal Communications Commission.

“We don’t see any significant regulatory barriers to a deal,” Jonathan Chaplin, an analyst at New Street Research LLC, said in a note Thursday.

Different Industries

With Dish and T-Mobile operating in different industries, the combination is unlikely to raise competition worries for the Justice Department, said Morris Bloom, an antitrust lawyer at Axinn Veltrop & Harkrider LLP in Washington.

The government may look at the deal as pro-competitive, according to Bloom, because it could create a stronger competitor to cable TV companies like Comcast Corp. and mobile carriers like Verizon.

Regulators may ask whether a deal would remove Dish airwaves as a potential source of competition, Kimmelman said.

Regulators rebuffed a 2014 attempt by Sprint Corp. Chairman Masayoshi Son to buy T-Mobile, on skepticism that potential benefits would be worth allowing the number of nationwide carriers to shrink below four. In 2012, AT&T dropped a bid to buy T-Mobile after regulators challenged that deal.

Neil Grace, an FCC spokesman, declined to comment as did Peter Carr, a Justice Department spokesman.

Regulators are reviewing AT&T’s $48.5 billion bid for Dish rival DirecTV. Comcast in April withdrew a bid for smaller Time Warner Cable Inc. amid regulators’ concerns the deal would harm online video competition.

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