T-Mobile, Sprint Make More Compromises; Pai Now Supports Deal

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Based on more concessions from T-Mobile and Sprint, FCC Chairman Ajit Pai said Monday he’ll urge his colleagues to approve the proposed $26 billion merger. It will also require Justice Department approval.

The combined company will sell Sprint’s Boost Mobile prepaid cell phone brand and commit to deploying a 5G network covering 97 percent of the U.S. within three years of the deal closing, Pai stated Monday. 

The sale of Boost Mobile is designed to address potential competitive issues that have been identified in the prepaid wireless segment.

Boost Mobile will be “set up to be a real competitor,” FCC officials told reporters. Chairman Pai believes this transaction “is now in the public interest.” 

This 5G network would also reach deep into rural areas, Pai said, with 85 percent of rural Americans covered within three years and 90 percent covered within six years. Also, T-Mobile and Sprint guaranteed that 90 percent of Americans would have access to mobile broadband service at speeds of at least 100 Mbps and 99 percent would have access to speeds of at least 50 Mbps.

T-Mobile and Sprint also pledged to rollout 5G service using mid-band spectrum, which could bring broadband home connectivity to rural parts of the U.S. where internet speeds still are often far below urban locations. “Demonstrating that 5G will indeed benefit rural Americans, T-Mobile and Sprint have promised that their network would cover at least two-thirds of our nation’s rural population with high-speed, mid-band 5G, which could improve the economy and quality of life in many small towns across the country,” Pai said.

FCC officials said the agency would monitor the New T-Mobile’s commitments and could penalize the company if it doesn’t meet buildout promises and a previous pledge to hold down consumer prices for three years. $2.4 billion is the maximum penalty and “repeatable,” for violating the buildout commitments, said one Commission official.

Pai intends to circulate a draft order among his colleagues in the coming weeks.

Reaction to the news was varied and swift.

May 21, 2019

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