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FCC Chair recommends OK of T-Mobile/Sprint merger, as U.S. Justice Dept. supports

Federal Communications Commission Chairman Ajit Pai circulated a draft order that would approve, subject to conditions, the proposed merger between T-Mobile and Sprint.

His decision received immediate backing from the U.S. Justice Department, which stressed on the order’s proposal of the divestiture of Boost Mobile, Virgin Mobile, and Sprint prepaid to Dish Network Corp. 

“After one of the most exhaustive merger reviews in Commission history, the evidence conclusively demonstrates that this transaction will bring fast 5G wireless service to many more Americans and help close the digital divide in rural areas,” Pai said.

“Moreover, 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,” said Pai, hoping his colleagues will vote to approve it.

The circulation of the draft order means that the matter is now ready for consideration by the full commission.

“I commend the FCC on passing this important milestone toward approval of the merger and divestiture and congratulate them on completing their thorough review and analysis,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. 

“We are now one step closer to strengthening competition for high-quality 5G networks that will benefit American consumers nationwide,” Delrahim said.

Pai’s order reviews concerns raised in the record as to the competitive effects of the transaction. It concludes that the divestiture of Boost Mobile, along with other conditions, would address the potential for competitive harm from the transaction.

While the transaction would increase competition and network quality in many respects, the draft order concludes that the Boost Mobile divestiture is necessary to ensure that price-sensitive customers in densely-populated areas are not harmed, the FCC said.
The draft order concludes that, as conditioned, the transaction would be in the public interest.

In addition to analyzing the proposed merger, in light of DISH’s planned acquisition of Boost Mobile, the order also addresses certain extensions, commitments, and modifications to Dish’s spectrum holdings to effectuate its deployment of a nationwide 5G network.
The order found that Dish’s planned 5G deployment, in connection with its acquisition of Boost, would also be in the public interest.

Meanwhile, the Justice Department’s Antitrust Division, along with the offices of five state Attorneys General, filed a civil antitrust lawsuit on July 26 in the U.S. District Court for the District of Columbia to block the proposed transaction.
 
At the same time, the Justice Department and the AG’s filed a proposed settlement that, if approved by the court, would resolve the competitive concerns of both parties.

The participating state AG offices represent Kansas, Nebraska, Ohio, Oklahoma, and South Dakota.

Under the terms of the proposed settlement, T-Mobile and Sprint must divest Sprint’s prepaid business, including Boost Mobile, Virgin Mobile, and Sprint prepaid, to Dish Network Corp., a Colorado-based satellite television provider. 

The proposed settlement also provides for the divestiture of certain spectrum assets to Dish. Additionally, T-Mobile and Sprint must make available to Dish at least 20,000 cell sites and hundreds of retail locations. 

T-Mobile must also provide Dish with robust access to the T-Mobile network for a period of seven years while Dish builds out its own 5G network.

Author Details
Business reporter with 25 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other areas of the economy.

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