FCC chairman endorses Sprint, T-Mobile merger

May 21, 2019, 00:44
FCC chairman endorses Sprint, T-Mobile merger

T-Mobile and Sprint are on the brink of clearing one of the two major regulatory hurdles to their blockbuster telecommunications merger. Commissioner Brendan Carr, a Republican, said Monday he will vote for the deal.

Unnamed sources close to the DOJ told Bloomberg the agency isn't satisfied with concessions that were offered to get the deal done because they don't go far enough to resolve antitrust concerns.

The decision raises the chances the merger will win final approval from federal authorities but the companies still face an anti-trust review by the US Department of Justice.

FCC officials, speaking to reporters in a briefing on Monday, said the agency agreed with that premise.

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. "We should seize this opportunity".

"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", Pai said in a statement.

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DOJ may try to block the Sprint/T-Mobile merger, according to a report.

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

One critic of the deal called the concession weak.

To address that concern, Boost is going to be the odd carrier out.

Boost is a reseller, so it will have to rely on access to the merged company's network, whereas now it resells Sprint service. "It helps them to roll out faster.T-Mobile has dominated the wireless industry for the last four years and grown faster than everybody else combined". Some would argue that combining the rapidly growing T-Mobile with Sprint will produce a new mobile powerhouse that would put more pressure on Verizon and AT&T than if the deal was rejected. Sprint has a huge amount of spectrum licensed in the 2.5 GHz band, flawless for 5G, but lacks the financial wherewithal on its own to build a 5G network in much of the country.

For the past four years, T-Mobile and Sprint have been trying to merge together.

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The combined company's more sizeable scale would help it rival USA giants AT&T and Verizon Communications, which dominate the United States market. In rural America, the requirements are 55 percent coverage within three years and 66.7 percent or two-thirds coverage within six years.

By year six, mid-band coverage will increase to 88% of the country, while nine out of 10 Americans will have access to 100 Mbps speeds. Democratic lawmakers have also been skeptical of the companies' promises. Like Pai, Carr says the new T-Mobile will be able to accelerate 5G deployment and aid rural communities.

In addition, the revised T-Mobile/Sprint plan guarantees that their 5G network would reach deep into rural areas, with 85% of rural Americans covered within three years and 90% covered within six years.

The combined company plans to deliver internet service to homes that compete against existing internet providers on price. 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.

In another nod to rural users, the merged company will be available to 300,000 more rural households within three years than originally promised. "By endorsing the T-Mobile deal, and T-Mobile's commitment to rural broadband, you're creating another competitor there where there is none today".

There are no other pricing commitments or binding rate promises beyond the previous stipulation that T-Mobile will not raise prices for three years.

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The latest commitments from the two carriers reaffirms that promise and reiterates that 5G coverage will come at no extra cost.