Federal Communications Commission (FCC) Chairman Ajit Pai on Monday said he plans to approve wireless carrier T-Mobile’s $26.5 billion takeover of rival Sprint, a crucial step for the deal’s approval.
T-Mobile US, Inc. and Sprint Corporation on Monday committed to the FCC that they would take a series of steps if the companies’ merger application is approved.
“Two of the FCC’s top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity. The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives," Pai said.
The two companies have committed to deploying a 5G network that would cover 97% of the U.S. population within three years of the closing of the merger and 99% of Americans within six years. This 5G network would also reach deep into rural areas, with 85% of rural Americans covered within three years and 90% covered within six years. Additionally, T-Mobile and Sprint have guaranteed that 90% of Americans would have access to mobile broadband service at speeds of at least 100 Mbps and 99% would have access to speeds of at least 50 Mbps.
“It’s also important that the companies would suffer serious consequences if they fail to follow through on their commitments to the FCC. These consequences, which could include total payments to the U.S. Treasury of billions of dollars, create a powerful incentive for the companies to meet their commitments on time," FCC Chairman added.
“In light of the significant commitments made by T-Mobile and Sprint as well as the facts in the record to date, I believe that this transaction is in the public interest and intend to recommend to my colleagues that the FCC approve it, " he added.
FCC Commissioner Brendan Carr also announced his support for the merger.
"I particularly want to thank Chairman Pai for his statement of support for these commitments and our merger – as well as his ongoing leadership to help ensure our country is a leader, not a follower, in the 5G era, " said T-Mobile's John Legere. "We look forward to continuing to meet and work with a variety of important stakeholders to demonstrate the powerful benefits the New T-Mobile will bring – but today’s filing is at the center of our plans to bring 5G to American consumers."
The full FCC must still vote, and the Justice Department must also clear the T-Mobile-Sprint deal.
Public-interest and labor groups as well as Democratic lawmakers have raised concerns about industry consolidation leading to wireless price increases and job cuts.
Bloomberg reports that the Justice Department is leaning against approving the merger because the remedies proposed by the companies don’t go far enough to resolve antitrust concerns.
he Justice Department during the Obama administration rebuffed a previous effort by Sprint and T-Mobile to combine.