California AG drops challenge to T-Mobile-Sprint merger

This photo shows signage a T-Mobile store in New York, Monday, April 30, 2018. On Wednesday, March 11, 2020, California’s Attorney General Xavier Bece...

This photo shows signage a T-Mobile store in New York, Monday, April 30, 2018. On Wednesday, March 11, 2020, California’s Attorney General Xavier Bece...

NEW YORK (AP) — California’s attorney general said Wednesday that the state will not appeal a judge’s decision approving T-Mobile's $26.5 billion purchase of Sprint.

Attorney General Xavier Becerra and New York Attorney General Letitia James led a coalition of 14 state attorneys general who sued to stop the deal. They had argued that eliminating a major wireless company would harm consumers by reducing competition and adding billions of dollars in costs through higher phone bills.

The companies said the deal would benefit consumers by helping the companies build a better next-generation, 5G wireless network than each could do alone. A federal judge in New York sided with the companies in February. New York decided not to appeal a few days later.

Becerra will hold a press conference Wednesday to announce a settlement with the companies.

The merger has been approved by the Justice Department and the Federal Communications Commission. As part of its deal with the federal government, T-Mobile and Sprint agreed to set up satellite TV company Dish as a new cellular competitor, though it will be a much smaller one.

A federal judge in Washington, D.C., must still approve the Justice Department settlement. A California utility board has also not approved the deal yet.

T-Mobile has said that it expects to close the deal as early as April 1. Its Sprint deal would create a new wireless giant that is roughly the size of AT&T and Verizon.