The Federal Communications Commission voted 2: 3 in favor of T-Mobile's acquisition of Sprint, an FCC spokesman confirmed to Ars today.
Republican Commissioners Brendan Carr and Michael O & Rielly support Ajit Pai's proposal to allow the merger while Democrats Jessica Rosenworcel and Geoffrey Starks voted against.
T-Mobile and Sprint had previously received approval from the Department of Justice for the merger, so the deal was fully approved by the federal government. However, the companies will not complete the merger yet, as they are facing a lawsuit by a group of Attorney Generals seeking to block the merger.
The FCC has not publicly released its decision to approve the merger. However, the final document should reflect what Chairman Pai proposed in May. The merged entity should provide 97% of the US population within three years and 5% of Americans within six years. This includes providing 5G to 85% of rural Americans within three years and 90% within six years.
The Sprint investigation continues. Commissioner Starks had asked the FCC to end the merger, while the agency was investigating that Sprint "raised" millions of dollars in government subsidies to 885,000 low-income Americans who did not use the Sprint service.
Rather than delay In the merger clearance order, Pai added a language confirming the ongoing investigation. Starks said that was not enough.
"The rush to judge here is illustrated by the fact that the draft was only amended on issues of my office at the last minute to expressly safeguard liability for this and all other other possible violations," Starks said today in a statement.
Democrats forecast higher prices
Starks and Rosenworcel both criticized the approval of the merger in their statements today. Starks said:
The Commission and Department of Justice experts agreed that the merger between T-Mobile and Sprint, as originally filed, would affect competition and raise prices. Rather than denying this merger, the majority has turned to the parties to make paperless commitments to expand broadband access and the use of 5G.
But these promises can not obscure reality. You do not have to be an expert to know that switching from four mobile operators to three will hurt the competition. This merger takes a bad situation and makes it worse. It will inevitably lead to higher prices and fewer options across the country. Quite simply, the impact of this ill-considered merger will hit hard-to-reach and rural communities hardest.
Rosenworcel argued: "Overwhelming evidence proves that the T-Mobile Sprint merger will reduce competition, raise prices and decrease quality, and slow innovation."
"We all saw what happens when Markets will focus on a merger like this, "she said. "In the aerospace industry, it has brought us baggage charges and smaller seats, and in the pharmaceutical industry, a handful of drug companies have raised prices for life-saving medicines, and there is no reason to believe that this time will be different."
Carr: Merger creates stronger third competitor
Pai and the Republican commissioners have today made no statements on the merger on the agency's website. However, Republican Commissioner Carr commented on Twitter and said the merger would "create a stronger third contender " and ensure that "99% of Americans receive 5G on an accelerated basis".
Pai argued in May that the merger "is a unique opportunity to accelerate the deployment of 5G in the United States and provide rural Americans with much faster mobile broadband."
Dish will try to replace the lost competition.
The Justice Department's agreement with the merging companies requires that T-Mobile and Sprint sell some assets to Dish Network, which will seek to build a 5G network. In particular, Dish could acquire frequency licenses, wholesale access to the combined T-Mobile / Sprint network and Sprint's prepaid business. This includes the subsidiaries Boost Mobile and Virgin Mobile.
Dish wants to cover 70% of the US population by June 2023, which would save 100 million Americans the opportunity of a fourth airline.
Consumer advocates and economists have warned against the merger. A group of seven economists argued in a motion to the DOJ that the agency's plan, which involves Dish, would not offset the anti-competitive effects of the merger. The DOJ accepts short- and medium-term competitive damages and reasons them "on the basis of a very optimistic assessment of possible benefits in the longer term," they wrote.
[I] For the Key and Recognized Competition Issues Four-to-three mergers are addressed by this strategy by rearranging some assets, negotiating some contracts, and then hoping for the best some years later. It is unclear which union could not be saved with the same system. "Economists wrote.