FCC chairman backs T-Mobile-Sprint deal in key endorsement

Ann Santiago
May 20, 2019

But on Monday, Trump-appointed Federal Communications Commission Chairman Ajit Pai said he would favor approving the proposed T-Mobile-Sprint deal after the carriers agreed to some fairly stringent conditions, including potential fines of up to $2.4 billion. According to reports these changes are apart of a deal to get approval for their merger according to CNBC.

The $26 billion merger would give control of all of Sprint's communication licenses and permissions over to T-Mobile, according to the FCC merger docket. Lyft, Uber, Snapchat, Tinder, Venmo, Square, Instagram...these are companies that simply do not exist without 4G. "The proposed transaction will strengthen competition in the US wireless market and provide mobile and in-home broadband access to communities that demand better coverage and more choices". This also comes with speed requirements: the carriers have guaranteed that 90 percent of Americans will have access to mobile broadband speeds of at least 100Mbps, and 99 percent will have access to speeds of at least 50Mbps.

And the companies said they will sell the prepaid brand Boost Mobile.

The Department of Justice, which has also been looking at the T-Mobile and Sprint merger for possible antitrust concerns, did not immediately respond to a CNET request for comment on the new concessions. Within six years of the merger closing, T-Mobile intends to market its in-home broadband to 28 million eligible households, 5.6 million of which will be rural.

As NPR's Alina Selyukh reported, "the full FCC is likely to soon approve the deal, while the Justice Department finishes its own review". The new T-Mobile will offer "the same or better rate plans at the same or better prices for three years", including 5G.

Later on Monday, fellow FCC Commissioner Brendan Carr signaled his support for the deal. "Does anyone really believe that this FCC, which has asked nothing of the big mobile companies for over two years, will require the companies to abide by these commitments?" But the FCC told reporters in a press call today that competition concerns were allayed by the companies' commitments not to raise prices for three years and to divest Boost Mobile, Sprint's prepaid wireless subsidiary that provides service to many low-income customers.

Pai released a statement saying that because T-Mobile and Sprint have committed to covering nearly the entire country with 5G over the next three years (97% of the population), increasing buildout of their mid-band spectrum holdings, creating another home broadband choice for rural customers who don't have many, and selling off Boost, Sprint's prepaid brand, he is willing to recommend an approval.

T-Mobile has about 80 million customers and Sprint about 55 million customers.

"We've seen this kind of consolidation in airlines and with drug companies", said FCC Commissioner Jessica Rosenworcel, who is a Democrat. "It hasn't worked out well for consumers", she wrote on Twitter. He added that the merger with Sprint will allow its 5G network to have eight times the capacity by 2024 than what would be possible if Sprint and T-Mobile would remain as stand-alone carriers. "But now the FCC wants to bless the same kind of consolidation for wireless carriers".

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