The United States Justice Department has approved the $26 billion merger deal between T-Mobile and Sprint. After over a year in regulatory limbo, the merger received the green light from the last federal agency to hold out, with the Federal Communications Commission already signaling that it will approve the deal.
The companies will have to sell the prepaid parts of Sprint’s business — Boost Mobile, Virgin Mobile, and Sprint prepaid to Dish, while that company will gain a chunk of Sprint’s spectrum. T-Mobile and Sprint will have to open up more than 20,000 cell sites and dozens of retail locations to Dish. In addition, T-Mobile has to offer Dish “robust access” to its mobile network for seven years while the latter creates a 5G network of its own.
The Dish Network proposal will “enable a viable facilities-based competitor to enter the market,” while the merger will speed up the rollout of “high-quality 5G networks for the benefit of American consumers and entrepreneurs,” the Justice Department said in a statement.
“With this merger and accompanying divestiture, we are expanding output significantly by ensuring that large amount of currently unused or underused spectrum are made available to American consumers in the form of high quality 5G networks,” Makan Delrahim, assistant attorney general of the DOJ’s antitrust division, said.
Both the FCC and the Justice Department are required to approve the deal before it can move forward. The deal is likely to be approved by the FCC, although the official vote has yet to take place. In May, FCC chairman Ajit Pai announced that he would be voting to approve the deal after the companies made new promises to provide greater wireless and broadband access to rural areas.
“In light of the significant commitments made by T-Mobile and Sprint as well as the facts in the record to date, I believe that this transaction is in the public interest and intend to recommend to my colleagues that the FCC approve it,” Pai said. “This is a unique opportunity to speed up the deployment of 5G throughout the United States and bring much faster mobile broadband to rural Americans. We should seize this opportunity.”
In today’s announcement from the Justice Department, five states have agreed to settle including Nebraska, Kansas, Ohio, Oklahoma, and South Dakota. New York and California are still pushing the lawsuit opposing the deal.
“We intend to be prepared to go to trial to fight for a fair, competitive, and equitable marketplace for consumers nationwide”
The merger isn’t done and dusted quite yet. The Justice Department’s proposed settlement is open to public comment for 60 days. The Federal Communications Commission has to approve the deal, though that isn’t likely to pose a problem for Sprint and T-Mobile, given Chairman Ajit Pai’s recommendation to green-light the merger. Perhaps a more pressing concern is that the companies are facing lawsuits from several states hoping to block the move over competition concerns.
“Today, the Department of Justice gave its blessing to the largest wireless merger in history,” FCC Commissioner Jessica Rosenworcel told Engadget in a statement. “I remain skeptical that this combination is good for consumers, good for competition, or good for the economy.”
