T-Mobile US merger with Sprint one step closer after FCC sign-off

Having secured a bunch of 5G network commitments, the US telecoms regulator has given its seal of approval to the merger of TMUS and Sprint.

The FCC had to make the usual judgment call when it comes to telecoms mergers of weighing up the reduction in competition with the increased investment power of the combined entity. As with apparently everything else in the US, the FCC is politicised and tribal. The three Republican Commissioners voted in favour, while the two republicans voted against.

To the winners go the spoils and the resulting announcement was heavy on the national benefits promised by ability of the merged company to do a better job of rolling out a 5G network than would the sum of its parts. The FCC (or at least the majority of it) is saying ‘the transaction will close the digital divide and promote the wide deployment of 5G services’. Let’s see.

“Specifically, T-Mobile and Sprint have committed within three years to deploy 5G service to cover 97% of the American people, and within six years to reach 99% of all Americans,” said the FCC announcement. “This commitment includes deploying 5G service to cover 85% of rural Americans within three years and 90% of rural Americans within six years.

“The parties 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. This includes two-thirds of rural Americans having access to mobile service with speeds of at least 100 Mbps, and 90% of rural Americans having access to speeds of at least 50 Mbps.

“Compliance with these commitments will be verified by rigorous drive-testing, overseen by an independent third party and subject to Commission oversight, to ensure that the service Americans receive will be what the parties have promised. And in order to ensure that these commitments are met, the parties will be required to make payments that could reach over two billion dollars if they do not meet their commitments within six years. Moreover, the parties will be required to make additional payments until they have fulfilled their commitments.”

In their lengthy dissenting letter the two Democrat Commissioners stressed how little reassurance they take from these commitments. “The vague promise of 5G does not change what was true when this deal was first proposed and what remains true today—the benefits of this merger, if any, simply do not outweigh the harms,” wrote Commissioner Starks.

This still isn’t a done deal, however. It is the last of the federal obstacles but some individual states are pushing back and, by amazing coincidence, everyone involved seems to be of the Democrat persuasion. This is just how things work over there and the two companies will presumably need to dip further into the pork barrel to win those states over.

Having secured a bunch of 5G network commitments, the US telecoms regulator has given its seal of approval to the merger of TMUS and Sprint.

The FCC had to make the usual judgment call when it comes to telecoms mergers of weighing up the reduction in competition with the increased investment power of the combined entity. As with apparently everything else in the US, the FCC is politicised and tribal. The three Republican Commissioners voted in favour, while the two republicans voted against.

To the winners go the spoils and the resulting announcement was heavy on the national benefits promised by ability of the combined entity to do a better job of rolling out a 5G network than the sum of its parts. The FCC (or at least the majority of it) is saying ‘the transaction will close the digital divide and promote the wide deployment of 5G services’. Let’s see.

“Specifically, T-Mobile and Sprint have committed within three years to deploy 5G service to cover 97% of the American people, and within six years to reach 99% of all Americans,” said the FCC announcement. “This commitment includes deploying 5G service to cover 85% of rural Americans within three years and 90% of rural Americans within six years.

“The parties 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. This includes two-thirds of rural Americans having access to mobile service with speeds of at least 100 Mbps, and 90% of rural Americans having access to speeds of at least 50 Mbps.

“Compliance with these commitments will be verified by rigorous drive-testing, overseen by an independent third party and subject to Commission oversight, to ensure that the service Americans receive will be what the parties have promised. And in order to ensure that these commitments are met, the parties will be required to make payments that could reach over two billion dollars if they do not meet their commitments within six years. Moreover, the parties will be required to make additional payments until they have fulfilled their commitments.”

In their lengthy dissenting letter the two Democrat Commissioners stressed how little reassurance they take from these commitments. “The vague promise of 5G does not change what was true when this deal was first proposed and what remains true today—the benefits of this merger, if any, simply do not outweigh the harms,” wrote Commissioner Starks.

This still isn’t a done deal, however. It is the last of the federal obstacles but some individual states are pushing back and, by amazing coincidence, everyone involved seems to be of the Democrat persuasion. This is just how things work over there and the two companies will presumably need to dip further into the pork barrel to win those states over. It’s a marathon, not a sprint.