T-Mobile US’ efforts to acquire and merge operations with Sprint is one step closer to completion. Federal Communications Commission Chairman (FCC) Ajit Pai today circulated a draft order to approve the transaction.
Describing it as “one of the most exhaustive merger reviews in [the FCC’s] history,” Pai concluded that the merger of the third- and fourth-largest nationwide operators “will bring fast 5G wireless service to many more Americans and help close the digital divide in rural areas.” The draft order comes almost three months after Pai originally backed the deal and encouraged his fellow commissioners to join him in that effort.
Pai and two fellow Republicans on the five-member commission pledged their support for the deal in May, all but ensuring the commission’s approval. FCC Commissioner Jessica Rosenworcel remains opposed to the T-Mobile merger with Sprint.
“I believe we need more competition, not less,” she wrote on Twitter after the order was posted online. “I am not convinced that removing a competitor will lead to better outcomes for consumers.”
Rosenworcel wants the public to have more opportunity to weigh in before the FCC votes on the deal. “Too much here has been done behind closed doors,” she wrote.
Her opposition might be overwhelmed by the majority of the commission, but a coalition of opposition at the state level is growing. Earlier this week, Oregon joined 15 other state attorneys general that are fighting to block the merger based on concerns about industry consolidation and increased prices. The lawsuit was originally filed in June, and a start trial date was recently pushed back to Dec. 9.
Shifting Conditions for FCC ApprovalOpposition to the merger is growing in some circles and waning in others. Indeed, much has changed since the merger was first announced in April 2018. The Department of Justice last month negotiated a complicated settlement with the companies before giving its approval. The new deal requires the combined company to meet 5G deployment plans and divest assets that will allow Dish Network to become a fourth nationwide operator.
“With the conditions included in this draft order, the merger will promote robust competition in mobile broadband, put critical mid-band spectrum to use, and bring new competition to the fixed broadband market,” Pai wrote. He added that the FCC order, if approved, will also impose “enforceable conditions” that requires the combined company to cover at least 99% of U.S. residents within six years.
The order also generally falls in line with the DoJ settlement and concludes that the divestiture of Boost Mobile “would address the potential for competitive harm” and “ensure that price-sensitive customers in densely-populated areas are not harmed.”
Finally, Pai argues in favor of Dish’s planned acquisition of Boost Mobile and says the FCC order will address “extensions, commitments, and modifications to Dish’s spectrum holdings to effectuate its deployment of a nationwide 5G network.”
T-Mobile US CEO John Legere, who is expected to remain CEO of the combined company at least through its formation, applauded the FCC development and described it as another milestone. “We appreciate the FCC’s assessment and can’t wait to start delivering on our commitments,” he wrote on Twitter.
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