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Dish founder Ergen says he asked for senator's help on T-Mobile/Sprint

By Sheila Dang
Dish Network Chairman Charlie Ergen attends the Google's annual developers conference in San Francisco

By Sheila Dang

(Reuters) - Dish Network Corp Chairman Charlie Ergen testified on Wednesday that the Justice Department's antitrust chief advised him on June 10 to ask a senator to speak to the Federal Communications Commission about approving a key piece of the merger of wireless carriers T-Mobile and Sprint.

The Justice Department approved the merger in July after the carriers agreed to sell some assets to satellite provider Dish. The merger, however, was still subject to approval by the FCC, which came in October.

Ergen's testimony on Wednesday came during the trial of a lawsuit filed in June by a group of U.S. states seeking to block the Sprint and T-Mobile merger. The states, led by New York and California, say the merger would lead to higher prices for customers.

The purchase by Englewood, Colorado-based Dish of the Sprint assets would allow Dish to build a viable competitor to the combined T-Mobile/Sprint, Verizon and AT&T.

It is unusual for a Justice Department official to suggest to a company that it use access to U.S. senators to lobby another federal government agency.

Attorneys for the states on Wednesday presented a text message from June 10 in which Makan Delrahim, the Justice Department's antitrust division chief, told Ergen: "Today would be a good day to have your Senator friends contact the chairman," a reference to FCC Chairman Ajit Pai.

The states opposing the merger filed their lawsuit the next day. A spokesman for Pai declined to comment on Wednesday.

Ergen testified that he asked Senator Cory Gardner of Colorado to speak with Pai and also spoke with Senate majority leader Mitch McConnell, but said he did not recall asking McConnell to reach out to anyone. Ergen did not say when he spoke to Gardner or McConnell.

The trial is scheduled to run until Friday, but the parties and the judge agreed to hold court on Saturday if needed.

The states, in their argument that Dish is not a suitable company to become a fourth carrier, pointed to a 2015 letter from the FCC that said two companies owned by Dish had inappropriately claimed $3 billion in taxpayer-funded discounts when they purchased spectrum. A statement from Pai at the time said Dish would need to pay back the $3 billion.



"OPTION B"

Throughout the trial, the states have argued that Dish is not a suitable company to purchase the Sprint assets and become a fourth wireless carrier because it has not been able to build a network using the wireless spectrum, or airwaves that carry data, it already owns.

Text messages seen by Reuters from T-Mobile's chief executive, John Legere, to Ergen showed that he himself had doubts about Dish's intentions.

"For full disclosure (which may be a new term to you) I have told Makan [Delrahim] I don't believe you are serious about doing a deal and ... that I would like to discuss option B with him," Legere texted Ergen on June 19, as the two men had been in tough negotiations for Dish to purchase the assets.

Dish declined to comment on the texts.


(Reporting by Sheila Dang in New York; Additional reporting by Diane Bartz and David Shepardson in Washington; Editing by Leslie Adler)