FCC order clearing T-Mobile's Sprint deal released with dissents

FCC order clearing T-Mobile's Sprint deal released with dissents

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T-Mobile and a former Sprint cellular phone store adjoin each other in Herald Square in New York on Saturday, Dec. 14, 2013.

T-Mobile and a former Sprint cellular phone store adjoin each other in Herald Square in New York on Saturday, Dec. 14, 2013. (Richard B. Levine/Sipa USA/TNS)

WASHINGTON - The Federal Communications Commission formally blessed T-Mobile US Inc.'s proposed purchase of Sprint Corp., publishing its order approving the merger of nationwide carriers passed by commissioners in a closed-door vote last month.

The wireless combination still needs to clear a court challenge brought by states. It was approved by the FCC on a 3-to-2 Republican-led vote on Oct. 16, and publication of the order was delayed.

"The transaction will help secure United States leadership in 5G, close the digital divide in rural America, and enhance competition in the broadband market," FCC Chairman Ajit Pai said in a statement.

The $26.5 billion deal won Justice Department approval in July as the carriers agreed to sell airwaves to Dish Network Corp. for a new wireless company to bolster competition once Sprint is eliminated as a choice for consumers.

T-Mobile and Sprint have agreed not to close their deal until after a decision in a multistate lawsuit. A trial in that suit is set for early December.

The states say the combination of the third- and fourth-largest U.S. wireless providers will decrease competition and raise prices in a market that's already concentrated. The deal's backers say it will quickly bring advanced 5G networks and create a stronger rival to leaders AT&T Inc. and Verizon Communications Inc.

The FCC, in its order, refuted claims the deal would harm consumers.

"The transaction would not substantially lessen competition," in part because low-cost provider Boost Mobile will be divested to Dish Network Corp., which also receives network access and retail stores to form a new competitor, the FCC said in the order.

Two FCC Democrats voted against the merger, saying it is bad for consumers.

"The most likely effect of this merger will be higher prices and fewer options for all Americans," Commissioner Geoffrey Starks said in an emailed statement. "It will establish a market of three giant wireless carriers with every incentive to divide up the market, increase prices, and compete only for the most lucrative customers."

T-Mobile Chief Executive Officer John Legere - who remade T-Mobile into a maverick competitor by eliminating annual contracts and offering unlimited data plans - disputes that prices will go up. He insists that by buying Sprint he will be able to better compete against industry leaders Verizon and AT&T, all to the benefit of U.S. consumers.

Sprint and T-Mobile are within reach of completing a deal that they have flirted with for years. In 2014, top officials at the Justice Department and the FCC rebuffed an effort by the companies to combine. The carriers returned in 2018, hoping for a more favorable reception from appointees of the Trump administration.

(With assistance from Scott Moritz)

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