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Federal Communications Commission Wisely Steps out of Way of Sprint/T-Mobile Merger

Today the Federal Communications Commission signaled it will likely vote to approve the merger of Sprint and T-Mobile.

With an announcement that FCC Chairman Ajit Pai will circulate a draft order urging his commissioner colleagues to approve the union, FCC officials pointed to the merger putting the U.S. at a competitive advantage in the race to roll out 5G services, with commitments from the merged company to deliver 5G services to 97% of Americans within three years and 99% of Americans within six years.

FCC senior officials went on to highlight benefits of the merger to rural residents with specific commitments from the merged company to deliver high-speed mobile broadband to 85% of rural Americans within three years and 90% of rural Americans within six years.

Officers from Sprint and T-Mobile also promised to provide an in-home broadband product if allowed to merge, thereby adding one more player to that market and increasing beneficial competition for consumers.

The Competitive Enterprise Institute has written before about the myriad competitive benefits of allowing Sprint and T-Mobile to combine their resources. We applaud the FCC chairman’s decision to let the market work to provide private capital for 5G deployment and other innovations, as opposed to blocking the merger and leaving government subsidies as the remaining and inferior option.

We’ve also urged regulators to let the merger continue without market-distorting conditions that would not naturally be undertaken by those private companies. The FCC’s approval appears to be a relatively clean deal, with the exceptions of requiring Sprint to divest itself of its Boost Mobile component and a reported promise not to raise consumer prices during the 5G building phase. A clean deal would be preferable, but it certainly could have been much, much worse.

Next up is a vote from the full commission, expected within the next couple of weeks. A separate (and less promising) review process continues across town at the Department of Justice, but the FCC’s announcement is a move in the right direction for American broadband consumers.