FCC Chairman Recommends Approval of T-Mobile and Sprint Merger

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FCC Chairman Ajit Pai made a statement (PDF) in which he approved of the merger between T-Mobile and Sprint. In the statement, he says his approval came after the two companies made some commitments regarding their 5G network. FCC Office of Commissioner Brendan Carr also made a statement (PDF) approving the merger.

VentureBeat provided a good summary of what commitments T-Mobile and Sprint will make:

  • 97% U.S. population coverage within three years of the merger’s close, including 85% of rural Americans
  • 99% U.S. population coverage within six years of the merger’s close, including 90% of rural Americans
  • A guarantee that 90% of Americans will have mobile broadband access at 100Mbps or more, with 99% able to access speeds of 50Mbps or more
  • A guarantee that at least two-thirds of rural Americans will have access to high-speed, mid-band 5G
  • An agreement to divest Boost Mobile to retain competitiveness in the prepaid wireless segment
  • Billions of dollars in penalties to the FCC if the merged “New T-Mobile” fails to follow through on these commitments.

Not everyone is happy about this merger. Bloomberg reported that the U.S. Justice Department is against approving the T-Mobile and Sprint merger. According to Bloomberg, “someone familiar with the review” said the reason was the DOJ feels the companies do not go far enough to resolve antitrust concerns.

Makan Delrahim is the head of the Justice Department’s antitrust division and the person who can put a stop to the merger. The DOJ reviews if a merger would hurt competition and raise prices for customers. The T-Mobile and Sprint merger would combine the number 3 and number 4 wireless carriers in the U.S., leaving just three national competitors.

Bloomberg says it is rare for the Justice Department and the FCC to diverge on a merger. It seems like there is a good chance that the merger will not be approved. I also think that people who are currently using either T-Mobile or Sprint might feel anxious about how the merger could affect the quality and cost of their service.