FCC chief supports T-Mobile and Sprint merger
While Pai’s backing is important to the proposed deal, further steps remain. The full commission must still vote, and the Justice Department must also clear it. Critics will also make the case that combining the country’s No. 3 and 4 carriers will ultimately restrict competition and lead to higher prices for consumers.
The FCC’s Pai said combining T-Mobile and Sprint will help bring faster mobile broadband to rural Americans. He said the companies have committed to deploying a 5G network that would cover 99% of Americans within six years. 5G promises faster speeds and could support new technologies. The companies also said they would divest a prepaid cellphone business, Boost Mobile, to address antitrust concerns.
Pai said T-Mobile U.S. Inc. and Sprint Corp. would suffer “serious consequences” if they don’t meet their FCC commitments, including the possibility of having to pay billions to the Treasury Department.
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Public-interest and labor groups as well as Democratic lawmakers have raised concerns about industry consolidation leading to wireless price increases and job cuts.
A merger between the nation’s third and fourth-largest wireless companies would leave just three major U.S. carriers, meaning T-Mobile and Sprint could someday raise prices once they don’t have to compete with one another for customers.
The Obama administration rebuffed the companies’ earlier effort to merge, as well as an attempted deal between AT&T and T-Mobile, on concerns that such deals would hurt competition in the wireless industry.
Shares of T-Mobile jumped 6% in morning trading, while Sprint’s stock soared 24%.
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