Justice Dept sought review of T-Mobile-MetroPCS deal in November
Like the Sprint-Softbank deal today, regulators had sought a review of the T-Mobile-MetroPCS deal, but the letter was sent in November and part of a standard process when a foreign company is involved with a merger.
Correction, 2:55 p.m. and 6:55 PT: CNET incorrectly stated that the Justice Department had sent a letter to the Federal Communications Commission today and implied there was additional concern about the national security implications of that deal. There have been no additional concerns raised, and the review is part of a standard process when a foreign company is involved in a merger.
The U.S. Department of Justice had previously asked the Federal Communications Commission to defer its review of the T-Mobile and MetroPCS merger in late November.
In a letter dated Nov. 26, 2012, attorney adviser Ty Brown with the Justice Department's National Security Division asked the FCC to defer its review of the merger while it reviewed possible national-security concerns. It is part of a common procedure that takes place when a foreign company is involved in a deal with a U.S. company, in this case T-Mobile parent Deutsche Telekom, which is based in Germany.
The deal is unlikely to receive any real scrutiny given the government's desire to create a stronger competitor in the wireless market.
Earlier today, the Justice Department asked the FCC to postpone its review of the SoftBank-Sprint deal, also on national-security grounds. The request was made because SoftBank is headquartered in Japan.
The November letter regarding T-Mobile and MetroPCS, which was worded identically to today's letter on Softbank and Sprint, stated that the Justice Department, the Department of Homeland Security, and the FBI "are currently reviewing this matter for any national security, law enforcement, and public safety issues but have not yet completed that effort." Brown then asked that the FCC "defer action" until the agencies notify the FCC of their own review.
The request, however, does not stop the FCC "shot clock," or time when the commission must make a decision on the deal, and it is still set to run out near the end of April. But the FCC won't weigh in on the deal until the Justice Dept. makes its decision.
T-Mobile USA, which is owned by Germany-based Deutsche Telekom, struck a deal to gain control of MetroPCS in October last year. MetroPCS shareholders will gain $1.5 billion in cash and a 26 percent stake in the new spin-off company, but Deutsche Telekom will own the majority stake.
It comes almost two years after AT&T made a bid to acquire T-Mobile, which failed after regulators declared their intention to block the deal. T-Mobile received cash and spectrum from the failed deal, which it then put into its own 4G LTE network.