The T-Mobile-Sprint merger got a huge boost Monday when FCC chair Ajit Pai announced the companies had made a commitments to deploy rural broadband and advance 5G next gen wireless service, and face billions in penalties if they don’t do that and other things they have promised.
That was apparently enough to get the FCC chairman on board, and to secure his vote for approval of the proposed merger. He will circulate a draft order approving the deal and with the conditions laid out in the next several weeks.
In lengthy and unusual statement given that the chairman usually does not comment on the mergers before the commission, the chairman concluded: “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. 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.”
He pointed out that the companies have committed to “deploying a 5G network that would cover 97 percent of our nation’s population within three years of the closing of the merger and 99 percent of Americans within six years. This 5G network would also reach deep into rural areas, with 85 percent of rural Americans covered within three years and 90 percent covered within six years. Additionally, T-Mobile and Sprint have guaranteed that 90 percent of Americans would have access to mobile broadband service at speeds of at least 100Mbps and 99 percent would have access to speeds of at least 50Mbps.”
T-Mobile has been saying that without the deal the company would not be able to build out that national 5G network as quickly.
Pai also said that the combined company has “offered specific commitments regarding the rollout of an in-home broadband product, including to rural households.”
The companies have also volunteered, or agreed, to divest Boost Mobile. That is the sort of move that likely gets the deal brownie points with the Justice Department, whose antitrust chief says he favors divestitures over conditions, though the deal has plenty of the latter apparently.
The deal still has to get two other votes at the commission, though that is likely to come from the other two Republicans, and Justice needs to sign off on its antitrust review, but it is unlikely the chairman would have announced his intention without believing he had the votes and the FCC and the commission generally coordinates its review with that of Justice.
June 15 will mark a year since the FCC opened its review of the deal. It has an informal 180-day shot clock on merger reviews, but it is not a hard deadline and has been honored as much in the breach as the observance.
