Text messages show that Makan Delrahim, head of the antitrust division of the Justice Department, was working behind the scenes to help the companies pull off an agreement.
WASHINGTON — As this summer’s $26 billion blockbuster mergers between T-Mobile and Sprint teetered, Makan Delrahim, President of the Justice Department’s antitrust division, labored behind the scenes to rescue it, This week, text messages were exposed in a lawsuit to block the contract.
Mr. Delrahim linked the executives of the organization with the F.C.C. and Congress leaders. And he gave investors insight into the F.C.C. chairman Ajit Pai’s thought, who would have to approve the deal as well.
Mr. Delrahim said in a text message in June, a month before regulators approved the agreement, that he is “open and willing” to negotiate the contract.
The correspondence between Mr. Delrahim and the executives involved in structuring one of the most controversial mergers in decades of the telecommunications industry provides a rare inside look at the hands-on work the top antitrust official of the Justice Department did to shape the transaction.
Although working behind the scenes to help companies resolve antitrust issues is not uncommon for a law enforcement official, efforts like Mr. Delrahim’s are almost always hidden from view.
The text messages indicate he played a crucial role in getting T-Mobile, Sprint, and another service, Dish, together to negotiate. The Justice Department said that without the advent of another rival such as Dish, it would not have approved the deal.
The Obama administration opposed a previously proposed merger between the firms and remains deeply unpopular with certain consumer groups. Believe it will raise prices for Americans, particularly in rural areas.
Mr. Delrahim oversaw the often aggressive business-to-business negotiations, pulling strings to get lawmakers and other regulators on board.
“It was generally a good chat with the president,” Mr. Delrahim wrote to Charles Ergen, Dish’s chief executive, the company that would prove crucial to the passage of the deal. He encouraged Mr. Ergen to lobby lawmakers the following day to urge Mr. Pai to approve new terms of the agreement that would give Mr. Ergen more time to build a competitive telecommunications business.
Mr. Ergen did this. According to the text messages, he told Mr. Delrahim that he had “outstanding” meetings in Washington and that he was talking about the deal with Mitch McConnell, the Senate majority leader.
A spokesman for the Justice Department said when asked about the text messages that “The Antitrust Division is proud of its work in the review on behalf of the American consumer of this important merger,” but refused to comment further.
T-Mobile and Dish declined to comment on the messages that the New York and California state attorneys general presented as evidence in a legal challenge to the merger. Sprint did not respond to requests for comment immediately.
The messages also reveal that SoftBank, the Japanese firm that controls most of Sprint, spoke about lending money to Dish to purchase the properties it needed to become a telecom company.
SoftBank would adequately fund a rival to its service, Sprint, in such an arrangement. But if a Sprint-T-Mobile merger did not occur, SoftBank still stood to lose financially.
SoftBank refused Thursday to comment.
Mr. Ergen told John Legere, T-Mobile’s chief executive, in a tense exchange that he was still working on getting terms of a deal done, pending approval by the board, and “any other issues from our / your team.”
“Waiting for the offer to be funded on Softbank?
Mr. Ergen said publicly this week that many possible lenders, including JPMorgan Chase and SoftBank, had emerged to help his company buy properties.
The third and fourth-biggest wireless companies, Sprint and T-Mobile, revealed their new plans for the merger in April 2018. The carriers promised their merger would allow them to pool resources and bring the next wireless broadband standard, known as 5 G, to rural America for the fifth generation. They would have a total of 80 million users from the United States.
The Department of Justice announced its approval of the transaction in July, citing the development in Dish of a fourth and new rival to purchase Sprint and T-Mobile assets to become a telecom company. The Federal Communications Commission’s chairman announced in a concurrent analysis that it was preparing to approve the agreement weeks later.
Many states contest the deal in court and can not close until the case is resolved. New York and California state attorneys general remain unconvinced that Dish will provide real market competition.
“Dish is a failing satellite T.V. provider with no experience running a mobile wireless business — and no current mobile wireless business,” said Paula Blizzard, Deputy Attorney General of California, on a call this month with journalists. “One day in the future, we can’t count on Dish to grow into a viable wireless company equal to the reach of Sprint today.”
During the review of the agency, Mr. Delrahim was forced to block the merger. Several Democratic senators, consumer groups, and general state attorneys said the agreement would harm consumers by Reducing from four to three the number of national wireless carriers. Competition reduction would most likely result in higher customer wireless bills, cautioned the critics.
To save the deal, the companies have come up with a solution: bring some of their wireless assets to Dish Network to buy to form another competitor and maintain four national mobile carriers.
Mr. Delrahim told reporters at a July press event that the deal would not have passed without Dish, who agreed to purchase $5 billion from Sprint’s prepaid wireless service, Boost, as well as other T-Mobile assets.