(TNS) — T-Mobile promised to provide free internet for low-income customers and reduced-cost plans for five years under a settlement the company reached with California that ends a lawsuit the state filed to block the company’s merger with Sprint.
Up to 10 million low-income households in the U.S. with children in school will be eligible for free broadband internet through the agreement, California Attorney General Xavier Becerra announced on Wednesday.
The five-year deal includes $700 million worth of WiFi hotspot devices. California can’t exceed more than 2 million total devices and connections each year.
The agreement commits the company for five years to offering California customers a $15 per month plan that includes unlimited talk, text and two gigabytes worth of data, and a $25 plan that includes five gigabytes.
The company also pledged to continue rate plans held in February 2019 for another two years.
“Despite the acrimony of litigation and lawsuits and court trials, you can really come to terms even with those with whom you go to battle in court,” Becerra said. “In this case, we didn’t see eye-to-eye with the way things were done by Sprint and T-Mobile, but we saw eye-to-eye enough to reach a settlement that included protections for California’s market and California’s people.”
T-Mobile and Sprint announced their plan to merge in April 2018. The California Department of Justice sued to block the proposed $25.6 billion union last summer, an attempt that was rejected in February by a New York federal district judge.
Sprint and T-Mobile are the third and fourth largest telecommunications companies in the United States, behind AT&T and Verizon Wireless. Becerra has argued the merger would threaten California jobs and consumer protections and disrupt market innovation.
Though the lawsuit failed, Becerra said California still secured the safeguards it aimed for in court and that the agreement would ensure the continuation of “fairness, good prices and competition.”
T-Mobile also committed to employment protections that includes a new call center in Kingsburg that’s estimated to create 1,000 new jobs, according to the settlement.
The company estimated that employees at the Central Valley center would be paid between $1,129 and $1,254 per week, according to an analysis by the Berkeley Research Group.
The company pledged that the number of its future workforce will be equal to or greater than its current combined employee numbers, within three years of the merger’s closing date.
Becerra said the new T-Mobile would aim for a 60 percent participation rate in its diversity and inclusion program within the next three years. The company also agreed to waive non-compete agreements for the next year, which are already banned in the Golden State.
T-Mobile said it would reimburse California and the states that joined in the lawsuit legal and investigation fees that total $15 million.
The company did not immediately respond to a request for comment, but said in 2018 that “The combined company will have lower costs, greater economies of scale, and the resources to provide U.S. consumers and businesses with lower prices, better quality, unmatched value, and greater competition.”
©2020 The Sacramento Bee (Sacramento, Calif.). Distributed by Tribune Content Agency, LLC.
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