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FCC Clears T-Mobile/Sprint Merger Deal

Sprint CEO Marcelo Claure (left) and T-Mobile CEO John Legere on the floor of the New York Stock Exchange on April 30, 2018.
Image credit: Richard Drew

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The U.S. Federal Communications Commission on Tuesday released its Oct. 16 order allowing T-Mobile to merge with Sprint in a $26.5 billion deal. The commissioners approved the deal last month on a closed-door, 3-2 party-line vote.

The merger was praised by Republican commissioners as a boon for rural America and by Democratic commissioners as a disaster for consumers. The merger still faces a legal challenge by a coalition of state attorneys general.

“The Commission found that the transaction will help close the digital divide and advance United States leadership in 5G, the next generation of wireless connectivity,” the FCC said in a statement. “Specifically, T-Mobile and Sprint have committed within three years to deploy 5G service to cover 97% of the American people, and within six years to reach 99% of all Americans. This commitment includes deploying 5G service to cover 85% of rural Americans within three years and 90% of rural Americans within six years.

Dissenting Democratic commissioners said the promises T-Mobile and Sprint made are not enforceable and that the merger will shrink the number of national providers from four to three, thereby reducing competition overall.

“In the short term, this merger will result in the loss of potentially thousands of jobs,” wrote Commissioner Geoffrey Starks. “In the long term, it will establish a market of three giant wireless carriers with every incentive to divide up the market, increase prices, and compete only for the most lucrative customers.”

In the states’ lawsuit, lead by New York and California, state attorneys general argue that the merger will reduce competition and lead to increased costs for consumers. Their suit goes to trial in December.

The T-Mobile and Sprint merger has been in the works since the Obama administration. But the Justice Department and FCC opposed the deal back in 2014. Regulators under the Trump administration have been more sympathetic.

Sprint is owned by the Japanese conglomerate Softbank and T-Mobile is owned by Germany’s Deutsche Telekom.

Copyright 2019 NPR. To see more, visit https://www.npr.org.

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