U.S. Justice Department says concerned about T-Mobile CDMA shutdown on DISH

Signage is seen at the headquarters of the United States Department of Justice (DOJ) in Washington, D.C., U.S.
The headquarters of the United States Department of Justice in Washington, D.C., U.S. REUTERS/Andrew Kelly

WASHINGTON, Aug 9 (Reuters) - The U.S. Justice Department said in a letter released on Monday that it has "grave concerns" about T-Mobile's plan to shut down a network that Dish Network (DISH.O) uses to offer pre-paid service to customers, many of whom are poor.

T-Mobile, which closed its $26 billion deal for Sprint last year, had sold Sprint's Boost prepaid business to DISH as part of a deal to win U.S. government approval for its merger. The customers were on Sprint's CDMA network, which T-Mobile has now said that it planned to shut down on Jan. 1.

The letter, which was signed by the acting assistant attorney general for antitrust, Richard Powers, said that DISH had approached the Justice Department for help in the dispute.

"The Division is left with grave concerns about the potential for a nationwide CDMA shutdown to leave a substantial proportion of Boost's customers without service," said the letter, which is dated July 9 and addressed to executives at both DISH and T-Mobile. "The Division believes that the Final Judgment may be violated by one or both Parties if the network shutdown strands a substantial proportion of Boost customers."

Powers notes T-Mobile's assertion that it gave adequate notice of 15 months when only six is required, saying essentially that if users are stranded that it might indicate that the notice was insufficient.

DISH, which included the letter in its 10-Q, also came in for a bit of drubbing in the letter, with the Justice Department warning that "any failure by DISH to pursue all available avenues to prevent a widespread loss of services to the customers it acquired pursuant to that Final Judgment could raise concerns regarding its own compliance."

In a blog, T-Mobile CEO Mike Sievert blamed DISH for not taking care of its customers.

"This is a manufactured crisis, orchestrated by DISH, and it is about money, not customers," he wrote. "If DISH was really concerned for customers, they would simply take real action and get their customers new phones on time, before the network upgrade happens."

Reporting by Diane Bartz Editing by Sonya Hepinstall

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