Mobile and Sprint merger receives approval recommendation from the FCC

T-Mobile and Sprint are on the brink of clearing one of the two major regulatory hurdles to their blockbuster telecommunications merger.

The Department of Justice is leaning against approving the T-Mobile-Sprint merger, according to a report from Bloomberg.

But Pai said the deal was now intended allay such concerns.

Pai's statement on the merger said he's approving it in large part because T-Mobile and Sprint "committed to deploying a 5G network that would cover 97 percent of our nation's population within three years of the closing of the merger and 99 percent of Americans within six years".

T-Mobile's US Inc's $26 billion acquisition of rival Sprint Corp won the support of the head of the Federal Communications Commission (FCC) on Monday, in a big step toward the deal's approval.

Today, T-Mobile announced new commitments to boost its 5G network coverage in the USA within three years after the merger is complete.

Pai released a statement saying that because T-Mobile and Sprint have committed to covering nearly the entire country with 5G over the next three years (97% of the population), increasing buildout of their mid-band spectrum holdings, creating another home broadband choice for rural customers who don't have many, and selling off Boost, Sprint's prepaid brand, he is willing to recommend an approval. In addition to their own offerings, both Sprint and T-Mobile have wholly owned subsidiaries - Metro by T-Mobile in the case of T-Mobile and Virgin and Boost in the case of Sprint - that rely on their parent networks for service.

In another new commitment, the combined T-Mobile/Sprint pledged to roll out an in-home 5G broadband product including to rural households.

The Justice Department in 2011 blocked an attempt by AT&T to acquire T-Mobile, saying the market was already too concentrated to allow it. T-Mobile is just finishing building a new network for 4G using the 600 MHz band. The merger would combine third-largest T-Mobile with fourth-largest Sprint in competition with the two biggest providers, Verizon and AT&T.

T-Mobile and Sprint will have to deliver on the speed promise within six years, FCC officials told reporters. Furthermore, T-Mobile and Sprint promise that 90 percent of Americans will have access to mobile broadband service at speeds of at least 100 Mbps and 99 percent will have access to speeds of at least 50 Mbps. "We've seen this kind of consolidation in airlines and with drug companies". They have been weighing potential a loss of competition and higher prices for consumers against the prospect of a more powerful No. 3 wireless carrier that can build a faster, better 5G network. The FCC is not requiring any spectrum divestitures from the carriers.

Selling Sprint's pre-paid carrier Boost Mobile. "I have serious doubts". It pledges to offer those speeds to 85 percent of rural America within three years and 90 percent in six years.

"Does anybody expect that the FCC under Pai would be able to enforce these vague promises?"

Sprint and T-Mobile have been talking about their 5G plans even before proposing their combination, so it'll be tough to convince the Justice Department that the 5G buildout depends on it, said Amanda Wait, a partner at Norton Rose Fulbright and former Federal Trade Commission lawyer. It is a straight up illegal merger", he tweeted, adding: "Any honest assessment of the market concentration numbers that come from a standard antitrust analysis and application of the Department of Justice's merger guidelines leaves you with one and only one actual conclusion.