Federal Communications Commission Chairman Ajit Pai said Monday he will recommend approving T-Mobile's $26 billion merger with Sprint.
The proposed merger “is a unique opportunity to speed up the deployment of 5G throughout the United States and bring much faster mobile broadband to rural Americans,” Pai stated.
While Pai's move helps the companies inch closer toward combining, the deal isn't a sure thing. The Justice Department hasn't said it will approve the merger. If the transaction closes, the country will only have three major carriers -- Verizon, AT&T and the newly merged T-Mobile/Sprint -- all roughly the same size.
In regulatory filings, T-Mobile and Sprint promised to build out a 5G network that will extend to rural parts of the country -- many of which currently lack high-speed broadband access.
Pai said the companies are guaranteeing the new network will cover 97% of the country within three years, including 85% of rural Americans.
“The construction of this network and the delivery of such high-speed wireless services to the vast majority of Americans would substantially benefit consumers and our country as a whole,” he stated.
Both carriers have also promised not to raise prices for at least three years.
FCC Commissioner Brendan Carr, a Republican, also voiced support for the merger, stating it “will help the U.S. notch another win in the global race to 5G.”
But Democratic Commissioner Jessica Rosenworcel expressed reservations about the deal.
“We've seen this kind of consolidation in airlines and with drug companies. It hasn't worked out well for consumers,” she said in a tweet. “But now, the @FCC wants to bless the same kind of consolidation for wireless carriers. I have serious doubts.”
She is reviewing the proposed conditions of the deal and is calling for the FCC to publicly release the proposed conditions.
Consumer advocacy groups oppose the merger, arguing it will result in less competition and higher prices. Critics, including the group Free Press, dispute Pai's assertion the deal will improve broadband service.
“Chairman Pai crows that the companies’ so-called deal commitments would help close the digital divide and spur 5G deployment. But these speculative conditions wouldn’t move the needle on either score,” Free Press vice president of policy Matt Wood stated Monday.
He adds that the companies' spectrum “wouldn’t allow for decent rural coverage at 5G speeds.”
Previously, Free Press and other critics argued that both T-Mobile and Sprint are already building out their 5G networks and would likely continue to do so without merging.
Wood also calls the proposed 3-year price freeze “meaningless,” arguing prices “are falling and likely would continue to drop in the absence of this merger.”