Antitrust authorities cleared the way for Xperi to buy TiVo. The all-stock deal has an enterprise value of $3 billion and is expected to close in Q2 (see report, Dec. 20). An FTC early termination notice dated Tuesday and released Wednesday ended the transaction's Hart-Scott-Rodino waiting period.

DOJ's defense of T-Mobile's buy of Sprint “unnecessarily and without legal basis seeks to undermine the states’ important and independent role in enforcing antitrust laws,” Washington Attorney General Bob Ferguson (D) wrote Monday in a letter (in Pacer) to Judge Victor Marrero at U.S. District Court for the Southern District of New York. Ferguson joined state plaintiffs objecting to the DOJ and the FCC urging deference to their conditional OKs (see 2001090023). Ferguson, from T-Mobile’s home state, isn't one of the states suing. “The Statement’s comments on state merger enforcement bears a far closer resemblance to a defense of DOJ’s settlement with the Defendants than sound competition policy,” the AG wrote. “Co-enforcement is woven into the fabric of the nation’s antitrust laws, and diminishing the role of the states in merger enforcement both overlooks the law and is shortsighted.” Ferguson disagreed with Justice that anticompetitive effects in local markets can’t stop a national transaction. “The Washington state AG misreads the Antitrust Division’s Statement of Interest," a DOJ spokesperson emailed Tuesday. "The Antitrust Division expressly noted that states have an independent role in antitrust enforcement. It explained, however, that the court should not issue a nationwide injunction that would undo the substantial pro-consumer benefits of this merger given the remedies secured by the Antitrust Division and the FCC." T-Mobile and Sprint responded (in Pacer) Monday to state objections to the U.S. statement. “Plaintiffs both misstate their legal burden and mischaracterize the nature of the federal review and the importance of a uniform, national antitrust policy,” the carriers said. The deal “will have unambiguous competitive effects,” said economists who asked (in Pacer) to submit an amici brief. “DOJ proposes to permit this merger subject only to a complex and ultimately unworkable set of conditions on the conduct of the merged company and an entirely new outside party,” wrote seven economists including New York University’s Lawrence White and Nicholas Economides and Northeastern University's John Kwoka. “This is not a substitute for the actions necessary to preserve competition in mobile wireless service.” Closing statements at the SDNY trial start Wednesday at 10 a.m. in lower Manhattan.

The FTC and DOJ requested comment by Feb. 11 on draft vertical merger guidelines Friday. The FTC voted 3-0-2 to approve the draft, with the two Democrats abstaining. DOJ withdrew the 1984 non-horizontal merger guidelines, eliminating application of the guidelines for either agency. “Greater transparency about the complex issues surrounding vertical mergers will benefit the business community, practitioners, and the courts,” said Chairman Joe Simons. The guidelines will “provide more clarity and transparency on how we review vertical transactions,” said DOJ Antitrust Division Chief Makan Delrahim. The draft guidelines aren’t “supported by an analysis of past enforcement decisions, perpetuate an overdependence on theoretical models, and do not reflect all of the ways that competition can be harmed,” said Commissioner Rohit Chopra. He asked that the 1984 non-horizontal merger guidelines be rescinded due to economic shifts in the past 40 years. “Increasing concentration, declining new firm formation, and other market trends necessitate a modernization of vertical merger review,” he said. Commissioner Rebecca Kelly Slaughter said her biggest concern is an apparent safe harbor indicating agencies are unlikely to challenge vertical deals if the parties “have a share in the relevant market of less than 20 percent, and the related product is used in less than 20 percent of the relevant market.” She said the 20 percent threshold lacks evidence and justification. Commissioner Christine Wilson agreed the 1984 guidelines need to be updated and replaced. She suggested commenters weigh the safe harbor and its threshold, asking if agencies should focus on “oligopoly markets.”

Samsung agreed to buy TeleWorld Solutions, a network services provider of 4G and 5G network design, testing and optimization services to mobile service and cable operators. The acquisition will address the need for accelerated end-to-end support in delivering 5G network solutions, Samsung said. TWS will operate as a wholly owned subsidiary.

DOJ Antitrust Division Chief Makan Delrahim filed a notice of appearance at U.S. District Court in Washington, D.C., in the Tunney Act review of T-Mobile's buying Sprint, he said Friday (in Pacer). DOJ didn’t comment. Judge Timothy Kelly said Wednesday he won't pause while states separately challenge the deal at U.S. District Court for the Southern District of New York (see 2001080051). The D.C. federal court held a telephone status conference with parties Friday. Amici may file briefs of up to 20 pages by Jan. 24; parties must respond by Feb. 7, Kelly said in a Friday minute order in case 1:19-cv-02232. State plaintiffs in the SDNY case may file one joint brief, he said: "All potential amici shall address in their briefs only the precise and limited issues before the Court in this proceeding." The D.C. federal court held a telephone status conference with parties Friday. Amici may file briefs of up to 20 pages by Jan. 24; parties must respond by Feb. 7, Kelly said in a Friday minute order in case 1:19-cv-02232. State plaintiffs in the SDNY case may file one joint brief, he said: "All potential amici shall address in their briefs only the precise and limited issues before the Court in this proceeding."

West Virginia Public Service Commission staff recommended OK'ing T-Mobile buying Sprint, in a Thursday memo in docket 19-1230-C-PC. Staff noted West Virginia isn’t one of several states challenging the deal. T-Mobile, Sprint and Dish applied Dec. 30 for West Virginia commission clearance.

T-Mobile and states opposing the carrier’s Sprint buy re-emphasized their positions, before closing argument Wednesday at U.S. District Court for the Southern District of New York. Arguing (in Pacer) plaintiffs don’t have to prove anticompetitive intentions, states highlighted companies’ internal documents cited at trial as showing such motives, including a 2011 Deutsche Telekom slide deck saying one transaction benefit is a "rule of three" that would reduce price competition (see 1912100029). States questioned Dish Chairman Charlie Ergen’s credibility: "There is considerable reason for this Court to doubt whether DISH will build the promised network; and, even if it does, DISH’s most optimistic projections still fall well short of being timely, likely, or sufficient to replace the lost competition that Sprint has long provided.” States rejected (in Pacer) DOJ and the FCC urging the court defer to federal agencies’ conditional OKs (see 1912200043). "States are independent enforcers of the antitrust laws, and it is the role of the Court -- not any federal agency -- to decide the lawfulness of the merger," they said. “A prosecutorial decision by” DOJ “not to challenge a transaction is not a determination that the proposed merger is lawful under the Clayton Act,” and the same goes for a commission OK, the plaintiffs said. T-Mobile said (in Pacer) DOJ and the FCC agree the deal will mean lower prices, better wireless service and increased competition: “Plaintiffs have failed to carry their burden to prove that the world with this merger is likely to be substantially less competitive than the world without it." If not allowed, T-Mobile and Sprint will suffer and Dish won’t enter the market, they said. It's false to say the biggest U.S. carriers welcome the takeover, defendants said. “AT&T has been working with third parties to thwart the merger,” said T-Mobile, citing a July 17, 2018, email from AT&T Executive Vice President-Regulatory and State External Affairs Joan Marsh to Communications Workers of America Telecom Policy Director Debbie Goldman. Marsh wrote that she “wanted you to be aware of potential [Committee on Foreign Investment in the United States (CFIUS)] issues that some are raising.” The attachment raises possible national security concerns, including T-Mobile and Sprint using Chinese equipment, Softbank’s relationships with Chinese companies, and a foreign-owned company potentially holding more spectrum than U.S. carriers. "As far as I know, AT&T has not taken a position on the merger," a CWA spokesperson emailed: The union opposes the deal "because it would hurt working people." AT&T didn’t comment. A settlement between states and the carriers is deemed unlikely (see 1912300033).

Don't expect big, transformative mergers and acquisitions in entertainment and media this year, experts said in recent interviews. Companies are focused on direct-to-consumer offerings and on integrating and rationalizing their properties. Big takeover targets already "are gobbled up," said wireline and wireless lawyer Laura Phillips of Drinker Biddle. Entertainment industry lawyer Paul Bernstein of Venable said there's interest in opportunistic deals like buying content libraries, and 2020 and 2021 will be a "war of attrition" in streaming service competition after having bulked up content holdings. "Now, people are going to start firing their rockets," with casualties being money burned through, he said. Echoed TVRev analyst Alan Wolk, "Everybody is kind of waiting to see how 'flixopocalypse' plays out." The "next decade will be the stage for a clash of titans," LionTree CEO Aryeh Bourkoff wrote investors. The scale of incumbents will limit some startups and the number of potential buyers, meaning more M&A among smaller or mid-sized companies, he predicted. New Street Research's Blair Levin noted questions remain if Comcast might buy T-Mobile regardless of whether T-Mobile/Sprint happens. There's an increased bipartisan sense antitrust enforcement hasn't been sufficiently aggressive, creating urgency to complete deals before DOJ gets more active, perhaps under a Democratic administration, Levin said. A question is whether anyone -- particularly a tech company like Apple or Google or Facebook -- might want to buy Netflix, Levin said: The current antitrust focus on Facebook and Google might make such a deal difficult, though. Vernable's Bernstein said it's unlikely Apple will buy Netflix since Apple seems to be dipping its toe into streaming video as an ancillary service. TVRev's Wolk said major streaming service M&A and consolidation is at least three to five years off. He said there's an outside chance ViacomCBS might buy Discovery for increased size to compete with Disney or AT&T. There could be more activity in partnering and bundling media services, such as offering another company's streaming music service alongside a streaming video product.

While California’s lawsuit against T-Mobile/Sprint awaits decision, the California Public Utilities Commission “has a full record and sufficient evidence to move forward with a finding that this merger is not in the public interest and to deny merger approval or impose significant conditions,” The Utility Reform Network (TURN) Managing Director-San Diego Christine Mailloux emailed Thursday. The carriers seek a February CPUC decision, but some say CPUC will wait for California Attorney General Xavier Becerra (D) and a verdict on his and other state AGs’ lawsuit at U.S. District Court for the Southern District of New York (see 1912230041 and 1912260020). TURN hopes “the CPUC and the AG can cooperate and work together, to the extent the law allows, to ensure a consistent policy and decision-making process to benefit and protect California wireless consumers,” Mailloux said. “However, these reviews have proven unpredictable and TURN is uncertain whether the offices are coordinating or would wait for one or the other to finish their processes.” The CPUC and California AG office didn’t comment.

California commissioners probably won't vote on T-Mobile/Sprint until March, even though carriers want it to happen Feb. 6 (see 1912230041), Tellus Venture Associates President Steve Blum blogged Thursday. T-Mobile's desired date would require the California Public Utilities Commission to propose a decision in early January. “Anything is possible, but I would bet against it,” wrote Blum. “My guess is that the CPUC will wait for [California Attorney General Xavier Becerra (D)] to weigh in, and I don’t think that will happen until there’s a verdict in his federal court challenge.” The U.S. District Court for the Southern District of New York hears closing arguments in that case Jan. 15. The verdict "could happen in time for a draft to be published and make it onto the commission’s 27 February 2020 agenda, but that’s optimistic,” said Blum.