T-Mobile reportedly reaches settlement with California AG on Sprint merger

According to two separate sources, T-Mobile has reached an agreement with California's attorney general regarding its proposal to merge with Sprint. The California AG has stood as a leading opponent to the deal.

The Wall Street analysts at New Street Research and Politico Pro reporter Leah Nylen both reported that the agreement would be announced later Wednesday.

Officials from T-Mobile and the California attorney general did not immediately respond to questions from Light Reading on the topic.

In a brief note issued to investors Wednesday morning, the New Street Research analysts wrote that California and roughly a dozen other states will drop their opposition to the proposed merger of T-Mobile and Sprint under the new deal. They had filed a lawsuit seeking to block the merger, though a judge ruled against them earlier this year. Under the new deal that will reportedly be announced, the states will agree not to pursue an appeal of that verdict.

In return, according to the analysts at New Street Research, T-Mobile will agree to several new conditions including a "$10 billion commitment that will deliver free internet access over the next five years and another $700 million commitment in hardware to 10 million households. Eligible families in the U.S. and Puerto Rico will receive up to 100GB of FREE internet access each year, one FREE Mobile Wi-Fi enabled hotspot and the option to purchase select Wi-Fi enabled devices at the company's cost."

Other conditions could include low-cost plans for low-income families, and potentially commitments to provide services for first responders.

If the agreement is indeed announced, it would line up with a proposal that T-Mobile floated in November, but would essentially codify the terms into a legally binding deal. In order to secure support from other attorneys general around the country, T-Mobile has already agreed to similar conditions with such states as Colorado and Mississippi.

While the agreement with the California AG is undoubtedly a win for T-Mobile, it's unclear how it might affect the California Public Utilities Commission. The CPUC is the only state utilities agency still evaluating the proposed merger, and has said it would discuss the merger on April 16.

— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano