T-Mobile and Sprint Merger Blessed by FCC President: NPR

A telecommunications merger that has been going on for years is about to remove a major regulatory hurdle.

Ajit Pai, chairman of the Federal Communications Commission, said Monday that he was approving the merger of T-Mobile and Sprint, a $ 26 billion deal. This took place after companies accepted various concessions, including a commitment not to raise prices for three years.

"I think this transaction is in the public interest and I intend to recommend to my colleagues that the FCC approves of it," Pai said. "This is a unique opportunity to accelerate the deployment of 5G across the United States and to make mobile broadband much more readily available to rural Americans. this opportunity."

As Alina Selyukh, of NPR, reported, "the FCC as a whole should soon approve the agreement, while the Justice Department completes its own review". The Department of Justice specifically examines antitrust concerns.

If approved, the number of major wireless carriers in the United States will increase from four to three. The merger would combine the third-largest T-Mobile and the fourth-largest Sprint in competition with the two largest suppliers, Verizon and AT & T.

Pai said the discussions with the companies had resulted in specific commitments to improve the 5G networks. If they do not respect these commitments, they could be fined billions of dollars.

The companies have agreed to deploy a 5G network that would cover 97% of the US population within three years and 99% within six years. The 5G network will cover 85% of Americans living in rural areas three years from now and 90% within six years, the companies said.

Under the terms of the agreement, the companies also pledged not to increase their rates within three years of the merger.

And companies have announced that they will sell the prepaid brand Boost Mobile. Under the terms of the agreement, this is supposed to "remove any doubts about the impact of the merger on prepaid wireless customers and competition," referring to the concern over the Impact on low-income Americans. The companies will continue to hold two other prepaid brands, Virgin Mobile and Metro.

"The new T-Mobile will be a disruptive rival, with the resources to battle against well-established monsters to drive competition and innovation for the benefit of everyone, anywhere in the world," said John Legere, CEO of T-Mobile. T-Mobile, in a statement. T-Mobile is controlled by Deutsche Telekom and Sprint is primarily owned by the Japanese company SoftBank.

"We have witnessed this type of consolidation in airlines and pharmaceutical companies," said the FCC commissioner. Jessica Rosenworcelwho is a democrat "But now, @FCC wants to bless the same kind of consolidation for mobile operators, I have serious doubts."

Gigi Sohn, a public interest lawyer and advisor to former FCC President Tom Wheeler, led by President Obama, said the deal was "still anti-competitive and anti-competitive. consumer". Wheeler has already warned that such an agreement would result in higher prices.

"Does any one really believe that this FCC, which has not asked the big mobile phone companies for more than 2 years, will force companies to meet these commitments? … The few unenforceable promises made by the merging companies are only lipstick on a pig, "said Sohn in a statement. "The DoJ and the FCC should block it."

Not everyone agrees on the impact it will have on consumers. "I do not think it will make a significant difference in prices in the future," Roger Entner, founder of telecommunications consulting company Recon Analytics, told NPR. "It's helping them deploy faster. (…) T-Mobile has dominated the wireless industry for four years and has grown faster than any other player, and that will only reinforce this trend."

He added that Pai's timing of the merger was probably tied to the new restrictions imposed by the United States on Chinese technology giant Huawei.

"Huawei is an important supplier for rural broadband telecom companies, as a quarter of the remaining small broadband access providers use Huawei equipment," he said. "By approving the T-Mobile agreement and T-Mobile's commitment to broadband in rural areas, you are creating another competitor where there is none today." hui. "

Entner added that this deal is likely to put intense pressure on these small rural carriers. "I would expect a number of small rural telecos to shut down or sell their products because the magenta giant is coming in and flies over them. It's as if Wal-Mart is coming up." in a specialty store in a small town in Kansas. " . "