T-Mobile US and Sprint’s dogged pursuit to merge and reduce the number of nationwide wireless operators from four to three has cleared a major hurdle. Federal Communications Commission Chairman Ajit Pai says he backs the $26.5 billion transaction and is encouraging his fellow commissioners to approve the merger after the companies agreed to a series of concessions.

Pai’s blessing all but ensures a positive outcome for the third and fourth largest U.S. network operators, but antitrust concerns are still being weighed by the Department of Justice. The deal cannot move forward without DOJ approval.

T-Mobile US and Sprint have committed to deploying a 5G network that covers 97% of the U.S. population within three years, and 99% of the population within six years of the merger’s closing. The companies also committed to cover 85% of rural residents within three years and 90% within six years.

“Two of the FCC’s top priorities are closing the digital divide in rural America and advancing United States leadership in 5G,” Pai wrote in his prepared statement. “The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives.”

Pai leads a Republican majority on the five-member FCC, and Commissioner Brendan Carr, a fellow Republican, also pledged his support for the proposed merger after determining it will increase competition and accelerate the buildout of 5G services. Commissioner Mike O’Rielly, the third Republican on the panel, hasn’t offered a statement yet on the latest developments. On Twitter, Commissioner Jessica Rosenworcel wrote that she has "serious doubts" about wireless carrier consolidation and called for the FCC to put the new proposal up for public comment.

The timing of the FCC’s impending decision is odd, according to Roger Entner, founder and lead analyst at Recon Analytics. “Usually the DOJ goes first not the FCC, so they’re going out of sync here,” he said.

Most of the concessions were already submitted in previous filings and testimonies provided by executives from both companies. T-Mobile US CEO John Legere now describes them as "verifiable, enforceable, and specific commitments." Pai said the companies "would suffer serious consequences if they fail to follow through on their commitments to the FCC," and that could include billions of dollars in penalties to be paid to the U.S. Treasury.

Beyond previously stated commitments, T-Mobile US now says it will sell its prepaid Boost Mobile brand to a “serious and credible buyer” to satisfy concerns about consolidation in the prepaid market. Under the terms of the agreement, the new combined company would maintain ownership of Sprint's Virgin Mobile and T-Mobile’s Metro prepaid brands.

Peter Adderton, a founder of Boost Mobile and vocal opponent of the merger, went to Twitter to applaud the FCC for doing the “right thing” and said he intends to bid for the company. “No matter who buys Boost (I will be trying to make it me), I can feel good knowing that the dealers and their employees and the whole Boost team will have futures,” he wrote.

On the whole, the concessions are much lighter than expected, according to Entner. “They’re all very achievable thresholds and all thresholds that they would have done anyway.” He described Boost Mobile as a “dead man walking” and said “T-Mobile is giving up something it didn’t want in the first place.” A required divestiture of Metro would have been painful, Entner added.

As part T-Mobile US and Sprint's 5G coverage guarantees, they committed to providing mobile broadband speeds of at least 100 Mb/s and 99% of the U.S. population will have access to speeds of at least 50 Mb/s. “Within six years of the merger’s close, average and peak speeds will have surged to 450 Mb/s and 4.2 Gb/s, respectively,” T-Mobile’s lawyers wrote in the new filing with the FCC.

One of the key factors and selling points for the proposed merger is the combined spectrum the new company will have in low, mid, and high bands. It “will cover 97% of the U.S. population with 5G on low-band spectrum and 75% of the population with 5G on mid-band spectrum” within three years, Legere wrote. “This should also force Verizon and AT&T to re-evaluate their 5G strategies and accelerate their investment and 5G deployment.”

Because spectrum is such a key factor to any mobile network operator’s success and potential dominance in a market, Entner expected the FCC to require the companies to divest some spectrum holdings to gain approval. “The big thing is spectrum. No divestiture of spectrum, really? This puts T-Mobile in such a dominant spectrum position,” he said.

If the deal is approved it would mark an end to a turbulent and at times unpredictable period for both companies involved. AT&T abandoned a deal to acquire T-Mobile US for $39 billion in 2011, which resulted in it paying a $3 billion cancellation fee and handing over critical spectrum assets to T-Mobile US. That money and spectrum helped propel the company’s ascent in the market.

T-Mobile US and Sprint also walked away from two previous attempts to merge in 2014 and 2017. The founding of T-Mobile US is also linked to the early days of Sprint when the company sold its GSM infrastructure to a company that was acquired by VoiceStream and later became part of T-Mobile US.

The proposed merger would mark the end for the Sprint brand, which has roots dating back to a telegraph wire that ran along the tracks of the Southern Pacific Railroad. And Sprint is no stranger to mergers and acquisitions. During a five-year period, the network operator acquired Nextel and multiple network affiliates, but the deal for Nextel was a financial disaster — the company wrote down 82% of the $36 billion it paid for Nextel within three years of the deal’s closing. Japan-based Softbank acquired a majority ownership stake in Sprint in 2013, and Sprint has mostly lagged behind its rival ever since.

Pai intends to formally submit a draft order calling for approval of the merger in the “coming weeks.”