FCC formally approves T-Mobile and Sprint merger
The U.S. Federal Communications Commission on Tuesday formally approved a merger between T-Mobile and Sprint, the final regulatory step toward the creation of a new mobile carrier expected to rival an existing duopoly held by Verizon and AT&T.
Today's FCC filing, issued as a "Memorandum Opinion and Order, Declaratory Ruling, and Order of Proposed Modification," PDF link greenlights transfer of control applications and was the last regulatory hurdle to creating a new carrier dubbed "New T-Mobile." Approval from the U.S. Department of Justice was obtained in July.
The two companies now face a group of state attorneys general who have sued to derail the agreement.
FCC commissioners approved the $26.5 billion deal in a vote last month that was drawn largely along party lines. The FCC's Republican majority, which voted for the merger, lauded the deal in statements issued following the formal announcement of its approval on Tuesday, reports CNN.
"The transaction will help secure United States leadership in 5G, close the digital divide in rural America, and enhance competition in the broadband market," said FCC Chairman Ajit Pai.
Tempering Republican zeal was Commissioner Jessica Rosenworcel, one of two Democrats to dissent who warned the joining of America's third- and fourth-largest mobile carriers could mark the end of "a golden age in wireless."
To help garner FCC and DOJ approval, T-Mobile offered a number of concessions including promises to spin off Sprint subsidiary Boost Mobile. More importantly, Dish Network, which is primed to become the nation's fourth wireless provider, will net wireless spectrum, some 20,000 cell sites and hundreds of stores as part of the arrangement.
The commitments failed to woo Commissioner Geoffrey Starks, who noted staff analysis of the merger found wireless prices would rise with the introduction of New T-Mobile, especially for low-income urban Americans, CNN reports.
"I have little confidence that these commitments will protect competition and result in deployment of 5G services beyond what might have occurred in the absence of a merger," Starks said.
T-Mobile and Sprint first announced the $26 billion merger in 2018, proposing a single combined carrier capable of competing against industry front runners Verizon and AT&T.
According to recent statistics, combined subscriber share of New T-Mobile puts the entity second to Verizon's crown with 29.4% of post-paid wireless accounts, reports Gizmodo. AT&T owns 28.9% of the market, while Verizon is the clear leader with a 40.9% share.
Today's FCC filing, issued as a "Memorandum Opinion and Order, Declaratory Ruling, and Order of Proposed Modification," PDF link greenlights transfer of control applications and was the last regulatory hurdle to creating a new carrier dubbed "New T-Mobile." Approval from the U.S. Department of Justice was obtained in July.
The two companies now face a group of state attorneys general who have sued to derail the agreement.
FCC commissioners approved the $26.5 billion deal in a vote last month that was drawn largely along party lines. The FCC's Republican majority, which voted for the merger, lauded the deal in statements issued following the formal announcement of its approval on Tuesday, reports CNN.
"The transaction will help secure United States leadership in 5G, close the digital divide in rural America, and enhance competition in the broadband market," said FCC Chairman Ajit Pai.
Tempering Republican zeal was Commissioner Jessica Rosenworcel, one of two Democrats to dissent who warned the joining of America's third- and fourth-largest mobile carriers could mark the end of "a golden age in wireless."
To help garner FCC and DOJ approval, T-Mobile offered a number of concessions including promises to spin off Sprint subsidiary Boost Mobile. More importantly, Dish Network, which is primed to become the nation's fourth wireless provider, will net wireless spectrum, some 20,000 cell sites and hundreds of stores as part of the arrangement.
The commitments failed to woo Commissioner Geoffrey Starks, who noted staff analysis of the merger found wireless prices would rise with the introduction of New T-Mobile, especially for low-income urban Americans, CNN reports.
"I have little confidence that these commitments will protect competition and result in deployment of 5G services beyond what might have occurred in the absence of a merger," Starks said.
T-Mobile and Sprint first announced the $26 billion merger in 2018, proposing a single combined carrier capable of competing against industry front runners Verizon and AT&T.
According to recent statistics, combined subscriber share of New T-Mobile puts the entity second to Verizon's crown with 29.4% of post-paid wireless accounts, reports Gizmodo. AT&T owns 28.9% of the market, while Verizon is the clear leader with a 40.9% share.
Comments
Yay!! Higher prices!! Whodda thought.
Someone will have to explain (again) how users win... /s
As 5G rolls out, financial stability will become increasingly important to finance such massive infrastructure improvements as well as R&D into continued technological advances. Wireless will be transitioning from 20 year old technology meant to service "car phones" to infiltrating and driving much of modern society.
I just hope that T-Mobile continues its more customer friendly and focused approach.
Of course, some people will simply say this is socialism and anti-capitalism but these same people are ok with government subsidies so what's the difference?
The problem is that this vertical integration limited innovation. For example, we paid for having fiber to the curb many years ago, but it was never done. Why? Because of a slow clunky bloated infrastructure that was overly invested in call quality and less interested in innovation. The path forward was clearly voip, but the bloated hierarchy wanted switching. There were demos of video calling back in the late 1970s that I remember as a kid. This is why we need competition. Cable companies, fiber companies, telecos, wireless, and more.
With one large blob utility, that idea, no matter how great it is, dies if they don't want it under whatever proposed terms.
Remember, when the iPhone was introduced no one but Cingular was willing to agree to Apple's terms. They were the hungriest at the time and willing to try anything to stay afloat. Good decision on their part. Bad decision on Verizon's and Sprint's (at the time).
We'd be having a completely different discussion today if Sprint would have taken Apple up on its original offer, or if the States only had Verizon as a national carrier.
And, by the way, the Trump's FCC declared that cell services were NOT utilities and could not be regulated as such. Now they are free to do whatever they want. I think they called that "Net Neutrality" and compared it to the "government running the internet".
For 100 years, AT&T had the opportunity to build out to everybody. And they didn't. For the same reason you just mentioned. Money. It makes no difference if it's 10 big companies, four big companies, or one single company. When decisions are left up to managers who have to meet a budget, the needs of the consumer are faceless, lost in a sea of balance sheets.
In the 1960's, farmers in rural areas of Utah and Nevada were deemed too expensive for Ma Bell to spend the time serving. One of my former bosses got a certificate from the FCC to serve those customers. He strung copper lines along fenceposts, built some of the switching gear by hand, and bought old surplus equipment to patch together a working phone company. For years the gear sat in old semi-trailers, and he would fly his Mooney like a bush pilot, going from ranch to ranch for installs, maintenance, and repairs. Over the next 50 years the company grew to cover communities in 11 counties across both states.
That company deployed gigabit fiber to the home in 2007 to those originally unserved communities, and expanded the lines to include customers who had never had a phone in their life. Meanwhile I twiddle my thumbs with CenturyLink's measly 3Mbps DSL in a suburban area: that service hasn't changed a bit since 2007.
Without incentive, large companies like the RBOCs and cable companies stagnate, period. That incentive comes in the form of potential loss of customers revenue. When Google Fiber announced it was coming to Utah, Comcast and CenturyLink either slashed prices or began massive upgrades--but only in areas where Google announced it was planning to build out.
Have no high expectations as a T-Mobile customer with deteriorating service, and a guaranteed increase in prices and onerous conditions once the three year grace period is over.
Forget all the Tuesday freebies Legere. Fix the damn service.
For myself, I switched from AT&T to Consumer Cellular to T-Mobile and got good service from each. Essentially, the only difference I noticed was price. (T-Mobile is a little more expensive than Consumer Cellular, but Consumer doesn't cover the Apple Watch.)