Tuesday, May 21, 2019

FCC Supports T-Mobile-Spring Merger, DOJ Opposes

The chairman of the Federal Communications Commission (FCC) is recommending that the agency approve the T-Mobile–Sprint merger after the two companies agreed to spin off Boost Mobile and submit to other conditions for the $26 billion deal.

According to The Hill, FCC chief Ajit Pai said in a statement Monday morning that he was encouraged by the companies' commitments to expand rural connectivity and to build out a large next-generation 5G wireless network as conditions for approving the merger.

"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.

Ajit Pai
The concessions: In a filing submitted Monday morning, T-Mobile and Sprint pledged to build out a 5G wireless network that would cover 97 percent of Americans within three years and 99 percent within six years.

The combined company also committed to selling off Boost Mobile, Sprint's prepaid wireless brand and a competitor to T-Mobile's Metro PCS.

"This is a unique opportunity to speed up the deployment of 5G throughout the United States and bring much faster mobile broadband to rural Americans. We should seize this opportunity."

GOP commissioners on board: His two Republican colleagues on the commission also announced their support for the deal, giving it the majority it needs to gain approval.

Democratic Commissioner Jessica Rosenworcel, though, said she has "serious doubts" about Pai's proposal to approve the transaction.

What's next: The deal will still need to get the Department of Justice's blessing, and media reports over the last several months indicate that the antitrust division has expressed concerns about combining two of the only four national phone carriers. It could also face opposition from state attorneys general, many of whom are reportedly concerned about the merger.

Bloomberg's David McLaughlin reports that the Justice Department is "leaning against approving T-Mobile’s proposed takeover of Sprint," despite the fact that the companies appear poised to win the backing of the FCC.

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