FCC Chairman Pai circulates order to OK T-Mobile/Sprint merger

FCC headquarters
The FCC said commission staff conducted a comprehensive review of the proposed transaction, including numerous engineering and economic models. (Ser Amantio di Nicolao/ CC BY-3.0)

Amidst calls for an extended public comment period, FCC Chairman Ajit Pai has shared with his colleagues a draft order that would conditionally approve the proposed merger of T-Mobile and Sprint.

The FCC said staff conducted a comprehensive review of millions of pages of documents and numerous engineering and economic models, crafting a draft order that concludes the transaction would be in the public interest. The chairman says the transaction will increase 5G infrastructure deployment in the U.S. and bring 5G to rural areas, with enforceable conditions requiring coverage of at least 99% of the country within six years.

“After one of the most exhaustive merger reviews in Commission history, the evidence conclusively demonstrates that this transaction will bring fast 5G wireless service to many more Americans and help close the digital divide in rural areas,” Pai said in a statement. “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.”  

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According to the staff's review, the order considers concerns raised in the record as to the competitive effects of the transaction. It concludes that the divestiture of Boost Mobile, along with other conditions, would address the potential for competitive harm from the transaction. The draft order concludes that the Boost Mobile divestiture is necessary to ensure that price-sensitive customers in densely populated areas are not harmed.

Pai’s endorsement of the deal was made public in May, before T-Mobile, Sprint and Dish Network came to an agreement that garnered the support of the Department of Justice (DoJ). Dish is being set up as a fourth national facilities-based competitor, with T-Mobile divesting some spectrum assets and Dish picking up the Boost Mobile and other prepaid brands from Sprint.

RELATED: T-Mobile, Sprint lambast calls for new notice seeking comment

Some rural interest groups have been calling on the FCC to issue a public notice launching a comment period, something T-Mobile and Sprint have formally opposed.

Common Cause, the Communications Workers of America (CWA), Free Press, Open Technology Institute and Public Knowledge on Wednesday added their names to the list of entities calling for a formal public comment session following the recent changes to the deal. They said failure to seek public comment on the latest developments would be a violation of the Administrative Procedures Act (APA).

Democratic Commissioners Jessica Rosenworcel and Geoffrey Starks have also said they want to see a public comment period, something Rosenworcel reiterated in a tweet after today’s draft order announcement.

In a statement, Starks said the Sprint/T-Mobile is one of the largest deals ever reviewed by the FCC. “What’s before us now is not the same deal the parties filed months ago. To address Department of Justice concerns, the parties made a new deal. I’m surprised the FCC is ignoring past precedent and practice by failing to seek public input,” he said.

“Sprint/T-Mobile will alter the future of wireless service in this country and will impact everyone with a cell phone,” he added. “I will review the 273-page item carefully. Given its size and scope, and bipartisan litigation pending by State AGs, we shouldn’t rush our ruling without public comment.”

The FCC said that in light of Dish’s planned acquisition of Boost, the order also addresses certain extensions, commitments and modifications to Dish’s spectrum holdings. The order finds that Dish’s planned 5G deployment, in connection with its acquisition of Boost, would also be in the public interest and delegates the associated extensions, commitments and modifications to the Wireless Telecommunications Bureau (WTB) for processing and implementation. 

In a July 26 letter to FCC WTB Chief Donald Stockdale, Dish had asked the commission to extend the construction deadlines associated with its AWS-4, 700 MHz E Block and AWS H Block licenses, with penalties attached if it does not meet certain conditions. Dish also committed to deploy 5G broadband service to at least 70% of the U.S. population by 2023.

RELATED: State opposition ramps against T-Mobile/Sprint deal

While the deal has the support of the DoJ and now appears headed to a vote by the full FCC, it still faces a lawsuit by a coalition of state attorneys general. Oregon this week was the latest state to join the lawsuit originally filed in June that now involves 16 AGs, led by those representing California, New York and Texas. 

Article updated Aug. 14 with additional sources calling for public comment. 

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