T-Mobile Lawsuit
T-Mobile Lawsuit
T-Mobile Lawsuit
Plaintiffs,
Case No. 1:19-cv-5434 (VM)
v.
ECF Case
DEUTSCHE TELEKOM AG, et al.
Defendants.
ANSWER OF DEFENDANTS
T-MOBILE US, INC. AND DEUTSCHE TELEKOM AG
“Defendants”) hereby answer the amended complaint filed on June 26, 2019 (the “Amended
Complaint”) by plaintiffs State of New York, State of California, State of Colorado, State of
PRELIMINARY STATEMENT
The merger of T-Mobile and Sprint will create a world-leading nationwide mobile
wireless network for the benefit of all consumers throughout the United States. The New T-
Mobile network will be far better and faster, delivering more advanced mobile wireless services
to more Americans at lower prices than any network either Sprint or T-Mobile could deploy on
its own. These lower prices, in turn, will drive more intense competition, including with the
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industry’s dominant carriers, AT&T and Verizon, which will benefit all consumers. The merger
will enable New T-Mobile to deliver the nation’s first robust, nationwide 5G service. It will
create a fierce new competitor for in-home broadband service, challenging cable monopolies
around the country. It will extend wireless service to tens of thousands of rural communities that
have been left behind in the nation’s digital divide – communities that Plaintiffs entirely ignore
in their Amended Complaint. In short, the merger will benefit Americans everywhere.
This is not just Defendants’ point of view. The Federal Communications Commission
(“FCC”) is the expert agency that regulates the wireless industry, enforces the country’s
communications laws, and ensures the competitive and public interest benefits of
telecommunications transactions. After one of the most exhaustive and thorough premerger
investigations in history, the FCC Chairman and two other Commissioners have voiced their
support for the merger. As a result, FCC action is expected in the near future. The FCC also
secured legally binding commitments from the parties to accelerate their promised business plan,
requiring New T-Mobile to deploy a 5G network covering at least 97% of the country’s
population within three years and 99% of the population within six years, to guarantee much
faster speeds, to roll out in-home broadband service, not to raise prices for at least three years
pending rollout of the new network, and to divest Sprint’s Boost Mobile business. Until
recently, Plaintiffs had acknowledged that the New T-Mobile network would be “fabulous” for
customers, but they doubted that New T-Mobile would actually build it. New T-Mobile’s 5G
build plan is now a verifiable and legally-binding commitment backed by billions of dollars of
Plaintiffs were right that New T-Mobile’s network will be a positive and exciting
development for consumers. As FCC Chairman Pai said in a May 20, 2019 statement: “The
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construction of this network and delivery of such high-speed wireless services to the vast
majority of Americans would substantially benefit consumers and our country as a whole . . . .
This is a unique opportunity to speed up the deployment of 5G throughout the United States and
bring much faster mobile broadband to rural Americans. We should seize this opportunity.”
Rather than seize the opportunity, however, the Attorneys General of 13 states and the District of
Columbia now ask the Court to deprive consumers in their own states and in the 37 others that
have not challenged the merger of the benefits of New T-Mobile’s 5G network. In doing so,
Plaintiffs’ Amended Complaint gets the facts and the law wrong.
Plaintiffs reject engineering and physics realities, which show that the combination of
Sprint’s and T-Mobile’s complementary spectrum and assets will create a far better network with
much greater capacity at lower cost than either could do separately. On its own, T-Mobile faces
increasing costs to create capacity because of its limited quantity of mid-band wireless spectrum,
which allows for deep network coverage. This, in turn, limits its ability to drive lower prices.
On its own, Sprint faces coverage gaps because of its lack of low-band wireless spectrum, which
allows for broad network coverage. This, in turn, limits its ability to attract customers. By
combining these spectrum and network assets in a single portfolio and using the right spectrum
for the right job, more capacity can be generated at much lower cost. In short, each company
provides what the other needs, creating a much more efficient, and therefore more competitive,
firm. Plaintiffs overlook the economic realities that there will be powerful incentives for New T-
Mobile to monetize this dramatically increased capacity, by lowering prices to attract customers
from Verizon, AT&T, Comcast, and others, sparking a new round of intense competition.
Plaintiffs also ignore major players in the wireless marketplace – including cable
companies and MVNOs that compete aggressively and have millions of customers – as if they
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are irrelevant to competition. And they fail to understand market realities about the changing
dynamics of the industry and the innovation that fuels its development, instead relying on a
fantasy that competition between T-Mobile and Sprint alone is somehow critical in the 5G world.
Plaintiffs are dwelling in the past while the rest of the world is building super highways.
New T-Mobile will build that super highway for wireless services. The combination of
Sprint’s and T-Mobile’s complementary assets will dramatically increase capacity of the network
– meaning more lanes to carry more wireless traffic for many more customers. All consumers
want faster and better wireless service, regardless of income level, and New T-Mobile’s 5G
network will provide it at levels beyond what they ever imagined and at lower prices. Contrary
to Plaintiffs’ claims, consumers will save billions of dollars as a result of the merger. And
contrary to Plaintiffs’ assertion, low-income consumers are the most likely to benefit from the
merger because they often rely on mobile wireless as their only form of internet connection.
Plaintiffs, not Defendants, carry the burden to prove that the merger will be
anticompetitive and will hurt consumers by causing higher prices. They cannot do so because
this merger will generate more, not less, competition. As the Merger Guidelines make clear but
Plaintiffs ignore, a primary benefit of mergers like this one “is their potential to generate
significant efficiencies and thus enhance the merged firm’s ability and incentive to compete,
which may result in lower prices, improved quality, enhanced service, or new products. For
U.S. Department of Justice and Federal Trade Commission Horizontal Merger Guidelines, §10
(2010). This is just such a merger, and without it millions of American consumers will be left
behind in the 5G era to struggle with “just ok” wireless and broadband services at higher prices.
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allegations addressed in detail below. In addition to the answers to individual paragraphs below,
x Plaintiffs dismiss the evidence that the combined network will operate at lower
cost than the parties’ stand-alone networks while generating dramatically greater
capacity and performance as “speculative” and “non-verifiable.” ¶¶ 94-95. In
fact, as the FCC has confirmed, the performance of cellular networks is constantly
being measured through verifiable metrics and is not “speculation.” The number
and location of towers and radios is a matter of counting, not “speculation.” And
the FCC has put in place precise, verifiable metrics that the New T-Mobile
network will have to meet.
x Plaintiffs wrongly assert that there are relevant local geographic markets. ¶ 41.
To the contrary, wireless carriers compete nationwide: they have nationwide
networks, they have national pricing, and they advertise prices across the country.
Plaintiffs hang their hat on an allegation that wireless carriers run local
promotions, ¶ 43, but these promotions represent a small fraction of average
pricing and cannot carry Plaintiffs’ burden of proving local markets.
For these reasons and others described below and to be presented at trial,
Plaintiffs’ claims are without merit.
as follows. Each paragraph below corresponds to the same-numbered paragraph in the Amended
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Complaint. Defendants deny all allegations in the Amended Complaint, whether express or
implied, that are not specifically admitted below. Defendants deny that the headings and
footnotes contained in the Amended Complaint constitute allegations of fact, and Defendants
deny them to the extent that they are considered as such. Defendants further expressly deny that
the Plaintiffs are entitled to the requested, or any other, relief. Defendants reserve the right to
amend this Answer. Defendants also state that, except to the extent indicated below, they lack
knowledge or information sufficient to form a belief about the truth or falsity of allegations that
relate to the actions, statements, or intent of Sprint Corporation (“Sprint”) or Softbank Group
(“Softbank”).
1. Defendants admit the allegations of Paragraph 1, but note that there are postpaid
plans that do not require a credit check. This merger will benefit all consumers of mobile
vital in the everyday lives of people and that mobile wireless telecommunications services have
improved in quality and price over time. Technological innovation has been a major factor in
these improvements. Past mergers, such as T-Mobile’s acquisition of MetroPCS, have also
played an important role, driving economies of scale, lower costs, and more efficient provision
of services, thus enabling lower prices for consumers. Defendants also admit that competition
for mobile wireless telecommunications services is essential to ensure continued innovation and
low prices for American consumers. The merger of T-Mobile and Sprint is procompetitive and
will result in further benefits to the everyday lives of consumers. The merger will enable
network improvements that will make the industry more competitive still, and these benefits
cannot be achieved in the absence of the merger. The allegations in the second, third and fourth
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sentences in Paragraph 2 characterize documents that are the best evidence of their contents and,
therefore, no response is required. To the extent the allegations differ from or mischaracterize
the documents, they are denied. Defendants lack sufficient information to form a view as to the
remainder of the allegations in Paragraph 2 and on that basis deny those allegations.
3. Defendants admit that T-Mobile and Sprint are the third and fourth largest
mobile network operators in the United States, but deny that either T-Mobile or Sprint dominate
any aspect of mobile wireless telecommunications services. Defendants admit that only AT&T,
Sprint, T-Mobile, and Verizon presently are the MNOs that cover more than 90% of the United
States population, but Defendants note that Sprint is forced to rely on roaming agreements so
supplement its limited geographic coverage. Defendants admit that Verizon and AT&T are
dominant in the provision of mobile wireless telecommunications services in the United States.
Sprint and T-Mobile are much smaller competitors than AT&T and Verizon and have failed to
win significant share from those larger competitors in recent years. In fact, Sprint has lost
significant share in recent years. Defendants admit that approximately 80 million and 55 million
devices connect to the T-Mobile and Sprint networks respectively, but deny that each device
Paragraph 3.
4. The allegations in Paragraph 4 characterize documents that are the best evidence
of their contents and, therefore, no response is required. To the extent the allegations differ from
or mischaracterize the documents, they are denied. Defendants admit that T-Mobile previously
attempted to merge with AT&T and that Sprint and T-Mobile contemplated a merger in 2014.
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5. Defendants admit the first sentence in Paragraph 5. Defendants admit after the
Defendants admit that AT&T, Verizon, T-Mobile, and Sprint are currently the MNOs that
provide nationwide service, but note that Sprint, like many smaller carriers, is forced to rely on
roaming agreements to supplement its limited geographic coverage. Defendants otherwise deny
the allegations in Paragraph 5. The combined firm will have a more efficient network that it will
use to invigorate competition against AT&T, Verizon, and others. If anything, the merger
Legere, which is the best evidence of its contents and, therefore, no response is required. To the
extent the allegations differ from or mischaracterize the transcript, they are denied. Defendants
7. Defendants deny the allegations in Paragraph 7 and note that there are postpaid
8. Defendants deny that the merger will lessen competition, deny that any
commitments are needed to address harm to competition, and therefore deny the last sentence of
Paragraph 8. Defendants otherwise admit the allegations of Paragraph 8, though also note that
merger, even if not convinced of the need for all the newly announced conditions being
proposed.” 1
9. Defendants deny that the effect of T-Mobile’s merger with Sprint may be
1
Mike O’Reilly (@mikeofcc), Twitter (May 20, 2019, 2:16 PM),
https://twitter.com/mikeofcc/status/1130583036595179520.
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substantially to lessen competition. In fact, the merger will increase competition. The remainder
of the allegations in Paragraph 9 are requests for relief or legal conclusions to which no response
10. Defendants admit that Plaintiffs purport to take the actions stated in Paragraph 10.
Defendants deny that they have violated or will violate Section 7 of the Clayton Act, and deny
that Plaintiffs are entitled to relief of any kind. To the extent that Paragraph 10 of the Amended
11. The allegations in Paragraph 11 are legal conclusions and therefore do not require
a response. To the extent a response is required, Defendants admit the allegations in Paragraph
11.
12. The allegation in Paragraph 12 states a legal conclusion and therefore no response
is required. To the extent a response is required, Defendants deny the allegations in Paragraph
12.
13. The allegation in Paragraph 13 states a legal conclusion and therefore no response
is required. To the extent a response is required, Defendants admit the allegation in Paragraph
13.
the extent a response is required, Defendants admit the allegations in Paragraph 14 to the extent
they describe the merger agreement at issue in this case. The Defendants otherwise admit the
16. Defendants admit that T-Mobile is a corporation organized and existing under the
laws of the State of Delaware with its headquarters in Bellevue, Washington. Defendants deny
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that T-Mobile is one of the world’s largest providers of communications services. Defendants
admit that T-Mobile is the third-largest mobile wireless telecommunications service provider in
the United States, as measured by subscribers, but note that it is approximately half the size of
each of Verizon and AT&T. Defendants admit that the amount of devices that use the capacity
of T-Mobile’s network has grown from approximately 33 million in 2010 to nearly 80 million in
2018, but deny that all of those devices represent T-Mobile customers and note that in a similar
period the amount of devices connected to the Verizon and AT&T networks has grown by over
115 million. Defendants admit that T-Mobile provides mobile wireless telecommunications
services in all 50 states, the District of Columbia, and Puerto Rico. Defendants admit that T-
Mobile provides mobile wireless telecommunications services under the T-Mobile and Metro by
T-Mobile (formerly MetroPCS) brand names. Defendants admit that T-Mobile transacts
business in New York, has offices in New York, and had $43.3 billion in revenues in 2018.
18. Defendants admit the first sentence of Paragraph 18. Defendants admit that
Sprint is the fourth-largest wireless carrier in the United States. Defendants admit that
approximately 55 million devices connected to the Sprint network at the end of 2018, but deny
that all of those devices represent Sprint customers. Defendants admit that Sprint is an
Defendants admit the third and fourth sentences in Paragraph 18. Defendants otherwise deny the
19. The allegations in Paragraph 19 characterize statements that are the best evidence
of their contents and, therefore, no response is required. To the extent the allegations differ from
or mischaracterize the statements, they are denied. Defendants deny the remaining allegations in
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Paragraph 19.
Combination Agreement, that is the best evidence of its contents and, therefore, no response is
required. To the extent the allegations differ from or mischaracterize the Business Combination
Agreement, they are denied. Defendants admit the other allegations in Paragraph 21.
22. The allegations in Paragraph 22 characterize the Commitment Letter that is the
best evidence of its contents and, therefore, no response is required. To the extent the allegations
23. Defendants admit the third and fourth sentences of Paragraph 23. Defendants
admit that three nationwide MNOs will remain but note the necessity of roaming agreements for
Sprint to offer nationwide geographic coverage. Defendants otherwise deny the allegations in
Paragraph 23.
25. Defendants admit that New T-Mobile plans to decommission the number of
Sprint cell sites alleged, because such cell sites are redundant of existing T-Mobile sites. The
decommissioning of these sites will not result in a reduction of capacity or service. In addition,
thousands of legacy Sprint sites will be retained and deployed with both Sprint and T-Mobile
spectrum in a manner that multiplies capacity relative to the sum of the standalone networks.
Sprint spectrum will also be deployed on T-Mobile sites. T-Mobile admits that it plans to close
certain redundant and therefore unnecessary retail stores after the merger is consummated,
thereby combining sales into a single retail location, reducing lease and other costs. Defendants
note that retained stores will have more employees due to greater sales volume. These savings
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will reduce New T-Mobile’s costs and enable New T-Mobile to offer lower pricing to its
26. Defendants admit that Sprint and T-Mobile entered into a limited roaming
agreement. That roaming agreement is limited in scope and duration. Defendants admit the last
sentence in Paragraph 26 but note the agreement is set to expire four years after the abandonment
27. The allegations in Paragraph 27 are legal conclusions and therefore do not require
28. Defendants admit the allegations in Paragraph 28, except deny that Mobile
29. Defendants admit that many customers “highly value” mobility, that access to
mobile wireless telecommunications is important to many individuals in the United States, and
that mobile wireless telecommunications services support an ecosystem of apps and programs
that have been estimated to have had an economic impact of more than $500 billion for the
United States economy in 2018. These important economic and consumer interests will be better
achieved by the superior network made possible by combining T-Mobile and Sprint. Defendants
lack knowledge or information sufficient to admit or otherwise deny the allegations in Paragraph
30. Defendants deny the allegations in Paragraph 30, because Plaintiffs have excluded
various industry players from their definition of retail mobile wireless telecommunications
services in order to make it appear that Sprint and T-Mobile have a higher share than they
actually do.
31. Defendants admit the first sentence of Paragraph 31. Defendants admit that the
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terms of mobile wireless telecommunications services agreements between T-Mobile and some
large enterprise and government customers are set through individual negotiations. Defendants
lack knowledge or information sufficient to admit or otherwise deny whether the terms of mobile
telecommunications services providers and enterprise and government customers are set through
32. Defendants admit that mobile wireless telecommunications services are sold in
the United States to retail customers on a prepaid or postpaid basis. Defendants otherwise deny
33. Defendants admit that AT&T, Sprint, T-Mobile and Verizon presently are the
MNOs that cover more than 90% of the United States population, but note Sprint relies on
5. Defendants also note that other carriers, including MVNOs, offer nationwide services.
34. Defendants admit that there are companies that operate regional networks,
provide network coverage in certain states or regions, and have roaming agreements that allow
them to provide nationwide service. Defendants otherwise deny the remaining allegations in
Paragraph 34.
35. Defendants admit there are MVNOs that purchase network access from MNOs.
Defendants also admit that MVNOs offer mobile retail services to customers. Defendants
otherwise deny the allegations in Paragraph 35 and note further that the term MVNO as
commonly used also includes mobile wireless telecommunication services providers such as
Comcast, Charter and Altice, which purchase wholesale capacity from MNOs and use their own
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37. Defendants admit that T-Mobile, Sprint, AT&T, and Verizon, among others, have
announced plans to deploy 5G in limited areas, with limited capacity, or with limited coverage
and that they have made statements about these limited deployments. The allegations in the
second and fourth sentences of Paragraph 37 characterize documents that are the best evidence of
their contents and, therefore, no response is required. To the extent the allegations differ from or
mischaracterize the documents, they are denied. Defendants otherwise deny the allegations in
Paragraph 37 and note that T-Mobile’s ability to roll out 5G will be greatly improved as a result
of the merger.
38. Defendants admit the first sentence of Paragraph 38. Defendants admit that T-
Mobile, Sprint, AT&T, and Verizon market plans that allow for use throughout the United States
without additional charges. Defendants admit that the effects of the merger will occur
nationwide, but deny that the merger will substantially lessen competition for retail mobile
38.
39. Defendants admit the allegations in Paragraph 39 to the extent that population
coverage refers to where customers live, not necessarily where they use their devices.
40. Defendants admit that many customers use mobile wireless telecommunications
services at and near their workplaces and homes, and in areas where they travel frequently.
Defendants deny the remaining allegations in Paragraph 40 except Defendants admit that MNOs
operate retail stores and sometimes offer very limited promotions in specific areas.
41. Defendants admit that the FCC has identified Cellular Market Areas for use in
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spectrum licenses but deny that these are relevant antitrust markets. Defendants otherwise deny
42. Defendants admit that T-Mobile and Sprint compete with each other to some
extent, though AT&T and Verizon are much more significant competitors, and there are other
competitors as well, including U.S. Cellular, Shentel, C-Spire, TracFone, Comcast, Charter,
Consumer Cellular, Ultra Mobile, and Lycamobile. Defendants also admit that the Top 50
CMAs encompass about 50% of the United States population. Defendants deny that the merger
would substantially lessen competition for retail mobile wireless telecommunications services in
any area of the United States, and otherwise deny the allegations in Paragraph 42.
43. Defendants admit that T-Mobile has occasionally run very limited short-term
promotions in areas where it has improved its network quality, and that those promotions may
include discounts on cellular handsets or service plans. Defendants note, however, that the vast
majority of T-Mobile’s pricing and promotions are nationwide. Defendants lack the knowledge
or information sufficient to admit or deny whether Sprint, AT&T, or Verizon run promotions
where they have improved the quality of their networks. Defendants otherwise deny the
44. Defendants admit that Sprint, T-Mobile, AT&T and Verizon compete on
infrastructure. Defendants admit that Sprint, T-Mobile, AT&T, Verizon, and DISH have
announced plans to deploy nationwide 5G networks, and that Sprint, T-Mobile, AT&T, and
Verizon have announced plans to initially launch 5G services in different cities. Defendants
admit that T-Mobile and Sprint intend to initially launch 5G services in several different cities,
including those listed in Paragraph 44, but note that limited launches in different cities will not
provide the same customer experience as the nationwide 5G network with deep capacity that will
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be enabled by the merger. Defendants admit that T-Mobile competes with Sprint, AT&T,
Verizon, regional carriers such as U.S. Cellular, Shentel, and C-Spire, and a host of MVNOs
including TracFone, Comcast, Charter, Consumer Cellular, Ultra Mobile, and Lycamobile to
45. Defendants deny the allegations in Paragraph 45. Plaintiffs have improperly
excluded industry players from their calculations to inflate their alleged shares, including a
46. Defendants admit that the Herfindahl Hirschman Index is a method that has been
used to measure market concentration. Defendants otherwise deny the allegations in Paragraph
46.
54. The allegations in Paragraph 54 characterize documents that are the best evidence
of their contents and, therefore, no response is required. To the extent the allegations differ from
or mischaracterize the documents, they are denied. Defendants otherwise deny the allegations in
Paragraph 54.
55. The allegations in Paragraph 55 characterize documents that are the best evidence
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of their contents and, therefore, no response is required. To the extent the allegations differ from
or mischaracterize the documents, they are denied. Defendants otherwise deny the allegations in
Paragraph 55.
56. The phrase “compete head-to-head” is vague. To the extent that Plaintiffs simply
mean that Sprint and T-Mobile compete for subscribers, Defendants admit that T-Mobile
competes in the ordinary course of business against competitors including Sprint, as well as
against AT&T, Verizon, regional carriers such as U.S. Cellular, Shentel, and C-Spire, and a host
of MVNOs including TracFone, Comcast, Charter, Consumer Cellular, Ultra Mobile, and
that Plaintiffs mean something else, Defendants lack sufficient knowledge or information to form
a belief as to the allegations and on that basis deny them. Defendants admit that, in competing
with these various players, T-Mobile monitors their pricing activities to inform its pricing and
other decisions. The allegations in the last sentence of Paragraph 56 characterize the transcript
of a deposition that is the best evidence of its contents and, therefore, no response is required.
To the extent the allegations differ from or mischaracterize the transcript, they are denied.
57. The phrase “compete head-to-head” is vague. To the extent that Plaintiffs simply
mean that Sprint and T-Mobile compete for subscribers on the basis of network quality,
Defendants admit that T-Mobile competes on network quality, pricing for cellular handsets, add-
ons offered through partnerships with companies like Netflix and Hulu, among other dimensions,
with Sprint, as well as AT&T, Verizon, regional carriers such as U.S. Cellular, Shentel, and C-
Spire, and a host of MVNOs including TracFone, Comcast, Charter, Consumer Cellular, Ultra
Mobile, and Lycamobile. To the extent that Plaintiffs mean something else, Defendants lack
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sufficient knowledge or information to form a belief as to the allegations and on that basis deny
58. Defendants deny that Sprint and T-Mobile compete “fiercely” in New York City,
though Defendants admit that T-Mobile competes in New York City with Sprint, as well as
AT&T and Verizon, and a host of MVNOs including TracFone, Charter, Consumer Cellular,
Ultra Mobile, and Lycamobile, including through targeted promotions. Defendants deny the
implication that New York City or any other local CMA is a relevant geographic market. The
allegations in Paragraph 58 characterize documents that are the best evidence of its contents and,
therefore, no response is required. To the extent the allegations differ from or mischaracterize
the documents, they are denied. Defendants otherwise deny the allegations in Paragraph 58.
60. Defendants deny that there are local markets and therefore deny the allegations in
the first sentence of Paragraph 60. Defendants admit that T-Mobile and Sprint compete across
the United States with each other as well as with AT&T, Verizon, regional carriers such as U.S.
Cellular, Shentel, and C-Spire, and a host of MVNOs including TracFone, Comcast, Charter,
Consumer Cellular, Ultra Mobile, and Lycamobile. Defendants admit that the quoted words in
marketing activities that T-Mobile has undertaken against various competitors. The remaining
allegations in Paragraph 60 characterize documents that are the best evidence of their contents
and, therefore, no response is required. To the extent the allegations differ from or
mischaracterize the documents, they are denied. Defendants otherwise deny the allegations in
Paragraph 60.
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61. The phrase “compete head-to-head” is vague. To the extent that Plaintiffs simply
mean that Sprint and T-Mobile compete for prepaid subscribers though, Defendants admit that T-
Mobile competes for prepaid subscribers with Sprint, as well as with AT&T, Verizon, regional
carriers such as U.S. Cellular, Shentel, and C-Spire, and a host of MVNOs such as TracFone,
Comcast, Charter, Consumer Cellular, Ultra Mobile, and Lycamobile. To the extent that
Plaintiffs mean something else, Defendants lack sufficient knowledge or information to form a
belief as to the allegations and on that basis deny them. Defendants admit that T-Mobile sells
prepaid services primarily through its Metro by T-Mobile brand and that Sprint sells prepaid
services primarily through its Boost Mobile brand, which will be owned by a third party after the
merger. Defendants lack knowledge or information sufficient to admit or deny that the words
quoted in Paragraph 61 appear in an internal Sprint document. Defendants otherwise deny the
that are the best evidence of their contents and, therefore, no response is required. To the extent
the allegations differ from or mischaracterize the documents, they are denied. Defendants
63. Defendants admit that T-Mobile competes with many companies, including
Sprint, but also AT&T, Verizon, regional carriers such as U.S. Cellular, Shentel, and C-Spire,
and a host of MVNOs including TracFone, Comcast, Charter, Consumer Cellular, Ultra Mobile,
and Lycamobile on a large set of competitive differentiators, only one of which is price. The
remaining allegations in Paragraph 63 characterize documents that are the best evidence of their
contents and, therefore, no response is required. To the extent the allegations differ from or
mischaracterize the documents, they are denied. The Boost business will be divested as part of
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Defendants’ commitments to the FCC, so allegations of competition with Boost do not support
Plaintiffs’ claim. Defendants lack knowledge or information sufficient to form a belief as to the
allegations regarding the Sprint document and on that basis deny those allegations and otherwise
64. Defendants admit that T-Mobile competes with many companies, including
Sprint, but also AT&T, Verizon, regional carriers such as U.S. Cellular, Shentel, and C-Spire,
and a host of MVNOs including TracFone, Comcast, Charter, Consumer Cellular, Ultra Mobile,
and Lycamobile, including on quality, price and add-ons. The merger will make New T-Mobile
66. Defendants admit that they sell products and services through a network of retail
stores, among other channels. Defendants admit that T-Mobile retail stores are sometimes
located on the same block or in the same shopping center as the retail stores of Sprint, AT&T,
Verizon, Comcast, or Charter, as well as retail stores that sell the service of TracFone, Consumer
Cellular, Ultra Mobile, Lycamobile, and a host of other MVNOs. Defendants admit that
MetroPCS stores are sometimes located on the same block or in the same shopping center as the
retail stores of Boost or Cricket, as well as retail stores that sell the service of TracFone,
Consumer Cellular, Ultra Mobile, Lycamobile, and a host of other MVNOs. Defendants
67. Defendants admit that Sprint launched a plan offering unlimited talk, text, and
data without mobile hotspot service or device financing options for $15 per month, for a limited
time in June 2018, through only its online and phone-based channels, for customers willing to
port their number. Defendants otherwise deny the allegations in Paragraph 67.
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68. The allegations in Paragraph 68 characterize Sprint’s recent filings with the U.S.
Securities and Exchange Commission, which are the best evidence of their contents and,
therefore, no response is required. To the extent the allegations differ from or mischaracterize
69. Defendants admit Sprint holds on average 160 MHz of 2.5 GHz spectrum, but
note that Sprint does not have 160 MHz in all of the Top 100 CMAs. Sprint is unable to utilize
this spectrum in a way that is anywhere close to how it will be utilized for the benefit of
Executive Chairman and former CEO, Marcelo Claure, which are the best evidence of their
contents and, therefore, no response is required. To the extent the allegations differ from or
mischaracterize the statements, they are denied. Defendants deny all the remaining allegations in
Paragraph 70.
provides Sprint customers limited access to T-Mobile’s network pursuant to the terms set forth
therein, but Defendants otherwise deny the allegations in Paragraph 71. Defendants note that the
roaming agreement is limited in both scope and duration, and it is not a substitute for the
efficiencies and synergies that would result from a full integration of the networks.
73. Defendants deny the allegations in Paragraph 73, but Defendants admit that the
74. Defendants admit that T-Mobile has an Un-carrier philosophy that provides the
cited benefits – including unlimited data use, international roaming without additional charges,
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postpaid service without long-term contracts, and video and music streaming without deducting
from the amount of high-speed data allotted to users on unlimited plans – to consumers in
competition with AT&T, Verizon and others. This approach will continue after the merger and
New T-Mobile will become even more competitive with the network improvements that will
come from the merger. Defendants otherwise deny the allegations in Paragraph 74.
76. Defendants admit that competition from T-Mobile has driven Verizon, AT&T,
and others to improve their offerings, and avers that the dramatic improvement in the network
made possible by the merger will increase the competitive pressure on those competitors to make
further improvements to keep pace. Defendants deny the allegations in the second sentence of
Paragraph 76 because the merger will increase, not decrease, competitive pressure on AT&T and
Verizon to accelerate their transition to 5G. Defendants otherwise deny the allegations in
Paragraph 76.
Legere, which is the best evidence of its contents and, therefore, no response is required. To the
extent the allegations differ from or mischaracterize the transcript, they are denied. Defendants
admit that the combined Sprint and T-Mobile would have an increased base, increased absolute
profit, and increased cash flow than either would as a standalone company. Defendants deny the
78. Defendants admit that T-Mobile competes with Sprint, AT&T, Verizon, as well as
regional networks such as U.S. Cellular, Shentel, and C-Spire, and a host of MVNOs including
TracFone, Comcast, Charter, Consumer Cellular, Ultra Mobile, and Lycamobile on multiple
dimensions, including price, network quality, network coverage, and features. Defendants admit
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that Sprint, T-Mobile, AT&T, and Verizon combined had wireless services revenues of more
than $160 billion. Defendants otherwise deny the allegations in Paragraph 78.
80. Defendants admit that wireless carriers offer some pricing information in stores,
online, and in television, radio, print and online advertisements. Defendants otherwise deny the
internal emails that are the best evidence of their contents and, therefore, no response is required.
To the extent the allegations differ from or mischaracterize the documents, they are denied.
83. Defendants admit that T-Mobile has pursued competitive and disruptive
strategies, but note that such behavior is manifestly inconsistent with price signaling that leads to
higher prices and thus deny plaintiffs allegation of same. Defendants admit that Verizon
announced that it would offer “Go Unlimited” plans for customers 55 and older at $60 per month
for one line and $80 per month for two lines, that T-Mobile announced that it would raise its
monthly price from $60 for two lines to $70 for its plan offered to customers 55 years and older
on March 8, 2018, and that Sprint announced that it would introduce its own Unlimited 55+ plan
at T-Mobile’s price point in May 2018, but deny that this anecdote provides a complete picture
of competition in the industry. Defendants otherwise deny the allegations in Paragraph 83.
requires an agreement to purchase wholesale capacity from at least one MNO, but Defendants
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note that the largest MVNO in the country, TracFone, which accounts for over 21 million
wireless subscribers, purchases services primarily from AT&T and Verizon. In addition, other
successful MVNOs, including Comcast and Charter, which have won a significant share of
industry gross additions since launching their services, do not rely on the Sprint or T-Mobile
networks to offer their wireless services. Defendants otherwise deny the allegations in Paragraph
85.
allegations in Paragraph 86 and on that basis deny the allegations in Paragraph 86.
allegations in Paragraph 87 and on that basis deny the allegations in Paragraph 87.
88. The allegations in Paragraph 88 characterize deposition transcripts, which are the
best evidence of their contents and, therefore, no response is required. To the extent the
allegations differ from or mischaracterize the transcripts, they are denied. Defendants otherwise
89. Defendants deny the allegations in Paragraph 89. By increasing the number of
top tier networks from two to three and greatly improving the T-Mobile network, the merger will
increase competition.
91. Defendants deny that studies in other countries have any relevance to this case,
deny that the selective assertions about studies in other countries in Paragraph 91 provide a
complete or accurate picture, and otherwise deny the allegations in Paragraph 91.
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96. Defendants admit that Sprint and T-Mobile have plans to deploy 5G service
absent the merger in some markets, but with far less capacity, and in Sprint’s case, far less
coverage, than the 5G service that New T-Mobile will be able to deploy following the merger.
statement from John Legere’s Twitter account that are the best evidence of their contents and,
therefore, no response is required. To the extent the allegations differ from or mischaracterize
these statements, they are denied. Defendants otherwise deny the allegations in Paragraph 96.
97. Defendants deny that the merger will result in harm to competition or consumers,
or that the FCC commitments do not guarantee the benefits of the merger. Defendants otherwise
98. Defendants deny that the merger will cause harm and deny that the network build
commitments do not guarantee the benefits of the merger. Defendants otherwise deny the
99. Defendants admit that the commitment to divest Boost does not identify a
potential buyer. Defendants deny that the merger will result in harm to competition or
100. Defendants deny that the merger will cause harm to competition or consumers and
deny that the pricing commitment made to the FCC does not guarantee the benefits of the
merger. Defendants admit that T-Mobile offers promotions. Defendants otherwise deny the
101. Defendants deny that the merger will result in harm to competition. Defendants
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102. Defendants deny that the merger will cause harm to competition or consumers and
deny that the legally binding commitments to contribute to the U.S. Treasury in the event their
commitments to the FCC are not met do not guarantee the benefits of the merger. These
penalties, which in the aggregate could total in the billions of dollars, are also subject to stringent
verification processes by the expert federal regulator in the telecommunications industry, the
FCC. These potential financial penalties provide a further incentive for the combined company
to follow through on its established plans of expanding output, reducing prices, and increasing
product quality, as well as to create another strong competitor through the divestment of Boost.
OTHER DEFENSES
Without assuming the burden of proof that it would otherwise not bear under applicable
law, Defendants assert the following affirmative defense: The Amended Complaint fails to state
a claim upon which relief can be granted. Defendants reserve the right to assert and rely upon
any other defenses that may become available or known to Defendants throughout the course of
this action, and to amend, or seek to amend, its answer or affirmative defenses.
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