FCC moves to greenlight T-Mobile merger with Sprint despite pending lawsuit

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FCC Chairman Ajit Pai. (Flickr Photo / FCCDotGov

T-Mobile and Sprint crossed another checkpoint Wednesday on their path to merge and create a $146 billion wireless company. The Federal Communications Commission circulated a draft of an order to approve the merger which will be voted on in the coming days or weeks.

Both of the regulatory agencies that have to sign off on the deal have indicated that they plan to do so. The two companies already won approval from the Department of Justice but face another hurdle. Fifteen states are suing to block the merger, claiming it will reduce competition and result in higher costs for consumers.

T-Mobile and Sprint spent months in touch-and-go negotiations with the DOJ. The Justice Department finally signed off on the merger last month thanks to last-minute concessions from the companies. The settlement requires T-Mobile to transfer assets to satellite TV provider Dish Network to create a new wireless carrier in an attempt to assuage concerns that combining the nation’s third- and fourth-largest providers would hurt competition. Sprint will divest Boost Mobile, Virgin Mobile, and its prepaid phone business under the agreement.

The Communications Workers of America called the FCC’s draft order “premature” in a statement. The mammoth labor union said that the conditions in the DOJ settlement should be circulated for public comment before the FCC approves the merger.

FCC signaled early on that it was likely to approve the deal. Ajit Pai, the Commission’s chair, reiterated his support for the merger in a statement Wednesday, claiming the “transaction will bring fast 5G wireless service to many more Americans and help close the digital divide in rural areas.” (Some experts are skeptical that the merger or 5G deployment broadly will improve access for rural Americans).

“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,” Pai said. “I thank our transaction team for the thorough and careful analysis reflected in this draft Order and hope that my colleagues will vote to approve it.”

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