FCC Chair: T-Mobile-Sprint Deal Will Help 5G, ‘Close The Digital Divide’

The mega-merger still faces a court challenge from nine states as well as the District of Columbia, but receives a formal blessing from the FCC.

The $26.5 billion merger between carrier giants T-Mobile and Sprint will “help secure United States leadership in 5G, close the digital divide in rural America, and enhance competition in the broadband market,” Federal Communications Commission Chairman Ajit Pai said Tuesday.

Pai’s comments come three weeks after the FCC officially approved the deal. On Tuesday the agency released an order detailing the 3-2 Republican-led vote that led to the Oct. 16 approval.

In a statement, Pai said that “after a lengthy and painstaking review process, the Commission has correctly concluded that this transaction is in the public interest.”

[RELATED: Third Time's A Charm: The $26.5B T-Mobile-Sprint Merger Is Approved]

“New T-Mobile will make the mobile broadband market more competitive in large swaths of rural America where neither New T-Mobile will make more competitive the enterprise wireless market, where neither Sprint nor T-Mobile is currently a strong to AT&T and Verizon,” he said.

Pai also said competition in the wireless market is dynamic and “while Sprint is not on the brink of financial collapse, there are serious questions about how strong a competitor it can be in the years to come on a standalone basis.”

In a dissenting opinion, FCC Commissioner Jessica Rosenworcel, a Democrat, said that “American consumers are savvy. They know what less competition looks like. This transaction makes the wireless market look more like the one they know with airlines and pharmaceuticals. When Washington blesses consolidation like this consumers routinely wind up with higher prices and lower quality services. It’s not fair. Moreover, it’s not smart.”

The FCC said as part of the deal, T-Mobile and Sprint promised that within three years to deploy 5G service to “cover 97% of the American people, and within six years to reach 99% of all Americans.” The companies also pledged that “within six years, 90% of Americans would have access to mobile service with speeds of at least 100 Mbps and 99% of Americans would have access to speeds of at least 50 Mbps.”

Although the deal passed FCC muster already, the merger still faces a court challenge from 15 states as well as the District of Columbia.

In July, the two companies received approval from the U.S. Department of Justice with some caveats. The combined company would have to divest Sprint’s prepaid businesses and Sprint’s 800 MHz spectrum assets to Dish Network. After the deal closes, the companies will provide Dish wireless customers access to the new company’s network for seven years and offer standard transition services arrangements to Dish during a transition period of up to three years. Dish will also have an option to take on leases for certain cell sites and retail locations that are decommissioned by the combined company.

CRN has reached out to T-Mobile for comment. T-Mobile’s stock rose slightly to $81.58 on Tuesday.