FCC Republicans backing T-Mobile, Sprint merger

The chairman of the Federal Communications Commission (FCC) is recommending that the agency approve the T-Mobile–Sprint merger after the two companies agreed to spin off Boost Mobile and submit to other conditions for the $26 billion deal.

FCC chief Ajit Pai (R) said in a statement Monday morning that he was encouraged by the companies’ commitments to expand rural connectivity and to build out a large next-generation 5G wireless network as conditions for approving the merger.

“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.

The concessions: In a filing submitted Monday morning, T-Mobile and Sprint pledged to build out a 5G wireless network that would cover 97 percent of Americans within three years and 99 percent within six years.

The combined company also committed to selling off Boost Mobile, Sprint’s prepaid wireless brand and a competitor to T-Mobile’s Metro PCS.

“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.”

GOP commissioners on board: His two Republican colleagues on the commission also announced their support for the deal, giving it the majority it needs to gain approval.

Democratic Commissioner Jessica Rosenworcel, though, said she has “serious doubts” about Pai’s proposal to approve the transaction.

What’s next: The deal will still need to get the Department of Justice’s blessing, and media reports over the last several months indicate that the antitrust division has expressed concerns about combining two of the only four national phone carriers. It could also face opposition from state attorneys general, many of whom are reportedly concerned about the merger.

The pushback: The proposed deal has generated significant opposition, mainly from Democrats and advocacy groups who worry about further concentration in the industry and the potential for higher prices for consumers.

The deal’s biggest critics are unlikely to be won over by the commitments the companies are making to the FCC nor by the agency’s apparent willingness to abdicate its ability to issue fines if the combined company breaks those promises.

“The supposed three-year price freeze is meaningless in a wireless market where prices are falling and likely would continue to drop in the absence of this merger,” Matt Wood, general counsel for the consumer group Free Press, said in a statement. “The little bit of price competition people have enjoyed thanks to the rivalry between Sprint and T-Mobile could keep sending prices lower.

“A meaningless and unenforceable promise to just tread water where we are now is a sad joke, and nothing more,” Wood added.

Trump officials divided? Gigi Sohn, who served as an adviser to former FCC Chairman Tom Wheeler, pointed out that Makan Delrahim, the head of the Justice Department’s antitrust division who will have final say over the deal, has spoken out against the type of behavioral merger conditions that the FCC is embracing.

“It seems that the real question is whether the DOJ is on the same page,” she said.