KANSAS CITY, Mo. — The Federal Communications Commission on Tuesday released its ruling, which outlines the conditions for its approval of the $26 billion merger between Overland Park-based Sprint and T-Mobile.
The FCC voted 3-2 along party lines in October to approve the merger. At the time, the commission did not provide details regarding the conditions of its approval.
Sprint said in a statement Tuesday that it was reviewing the order but was "pleased with the FCC’s approval and that this stage of the review process is complete."
After more than a year-long review, the FCC found approval of the merger to be in the public interest, saying in Tuesday's news release that it "will advance significantly the deployment of state-of-the-art 5G networks across the United States."
The commission detailed the conditions for the companies upon approval.
Within three years, T-Mobile and Sprint must deploy 5G service to cover 97% of Americans, including 85% of Americans living in rural areas, the FCC said.
Conditions to be met within six years of the deal include:
- Reaching 99% of Americans with 5G service;
- Reaching 90% of rural Americans with 5G;
- Delivering mobile service speeds of at least 100 megabits per second (Mbps) to 90% of Americans and speeds of at least 50 Mbps to 90% of Americans;
- Providing access to mobile speeds of 100 Mbps to two-thirds of rural Americans, and speeds of at least 50 Mbps to 90% of rural Americans.
The FCC said if the companies fail to comply with these conditions, they will have to make payments that could surpass $2 billion and additional payments until they've fulfilled the commitments.
The FCC also concluded the merger would not harm competition and would, in fact, enhance competition in rural America and will "help close the digital divide."
But that wasn't a universal sentiment.
FCC Commissioner Jessica Rosenworcel wrote in her dissent that "shrinking the number of national providers from four to three will hurt consumers, harm competition, and eliminate thousands of jobs."
She called the concessions the Sprint/T-Mobile "unenforceable" and "hollow promises."
Additionally, Rosenworcel derided the FCC's "political leadership" for rewriting the draft decision of "legal, engineering, and economic analysis produced by expert staff" behind closed doors.
In his dissent, FCC Commissioner Geoffrey Starks expressed disappointment that the majority decision ignored the possible loss of 20,000 to 30,000 jobs, primarily in the retail sector, through the consolidation of the market.
"The bulk of the savings realized through this merger will undoubtedly come from consolidating operations and thereby reducing staffing," he said.
Taking the longer view, Starks forsees the development of anti-competitive practices.
"It will establish a market of three giant wireless carriers with every incentive to divide up the market, increase prices, and compete only for the most lucrative customers," he said.
Starks said he hopes his worst fears won't come to fruition, but ultimately noted: "I fear that we will one day look back at this decision and recognize it as a moment that forever changed the U.S. wireless industry, and not for the better."
Research and Policy Director for the Communications Workers of America Debbie Goldman also released a statement critical of the merger:
The FCC’s review process governing the T-Mobile/Sprint transaction has been fundamentally flawed, lacking in transparency and failing to adhere to existing FCC rules and precedent.
CWA’s primary objections to this merger remain focused on its substantial public interest harm to competition, leading to higher prices and the loss of as many as 30,000 jobs.
Although the FCC Order acknowledges the merger will likely lead to store closures and job loss, the FCC fails to protect workers with employment-related conditions. And though the FCC concedes that the merger would likely lead to price increases, it places blind faith in the companies’ unsubstantiated pledges and commitments which are filled with loopholes. The divestiture deal with DISH fails to resolve the anti-competitive harms, as it simply creates DISH as T-Mobile’s largest customer, not a true competitor in the marketplace.
For these reasons and more, the pending state attorneys general lawsuit seeking to block the proposed merger is in a strong position to protect consumers and workers from this anti-competitive transaction.
The merger probably won't take place until 2020 at the earliest, T-Mobile
