FCC chair will approve T-Mobile and Sprint merger after promises of fast 5G rollout

Federal Communications Commission chairman Ajit Pai said in a statement today that he would vote to approve the proposed merger between T-Mobile and Sprint after T-Mobile made new promises to quickly deploy 5G across the country.

“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. “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.”

The two companies announced their intentions to merge last April, posing a deal worth around $26 billion that would shrink the nation’s wireless carrier pool from four major companies down to three. This change in market competition has long been a sticking point for both regulators and lawmakers on Capitol Hill, but Pai believes the merger would spur more benefits than harms overall.

The FCC’s approval comes with specific “enforceable” requirements. According to T-Mobile CEO John Legere, the New T-Mobile will need to roll out low-band 5G to 97 percent of the US population and mid-band spectrum 5G to 75 percent in three years. Low-band 5G will need to be extended to 99 percent and mid-band 5G to 88 percent after six years. There are specific goals for rural America as well, including extending low-band 5G to 85 percent of those areas in three years and bumping that up to 90 percent after six years.

The New T-Mobile will be required to file an annual “report card” with the FCC detailing its progress on 5G deployment. Compliance tests will be conducted by independent third parties paid for by the New T-Mobile. The companies have also agreed to launch in-home broadband across the country as well, but it’s unclear to how many households and at what speeds.

Boost Mobile will also be divested so the New T-Mobile will have to compete against it in the prepaid market.

The two companies have repeatedly promised to drive down wireless prices (or at least keep them the same), and they reaffirmed that promise in a statement put out by Legere today. No commitments have been made on pricing after three years of closing, however.

“It’s also important that the companies would suffer serious consequences if they fail to follow through on their commitments to the FCC,” Pai said. “These consequences, which could include total payments to the US Treasury of billions of dollars, create a powerful incentive for the companies to meet their commitments on time.”

Both Pai and Commissioner Brendan Carr have already voiced support for the measure. The merger still needs approval from the Justice Department before it can close.

Updated 5/20/19 at 1:55 p.m.: Updated to clarify that the merger will not be voted on at the June Open Meeting.