Sprint, T-Mobile Still Need OK From California Utility Regulator

T-Mobile US Inc. and Sprint Corp. cleared their biggest hurdle Tuesday in defeating a multistate lawsuit to block the $26.5 billion merger, but several smaller obstacles remain.

One potential roadblock is the California Public Utility Commission, which has yet to bless the review.

The combined company would be prohibited from operating in the nation’s most populous state if the regulator rejects the deal, an outcome that would likely lead to more litigation, said Gigi Sohn, a former Democratic FCC official who opposes the merger.

The California regulator, which hasn’t set a date for a vote, has until July 12 to ...