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FCC Approves T-Mobile / Sprint Merger

iCERT Board Member, T-Mobile

Adopted October 16, 2019 - Released November 5, 2019 Congratulations to iCERT Board Member, T-Mobile - FCC Approves T-Mobile / Sprint Merger - Additional Documents:

T-Mobile US, Inc. (T-Mobile), and Sprint Corporation (Sprint, together with T-Mobile, the Applicants) have filed applications pursuant to sections 214 and 310(d) of the Communications Act of 1934, as amended (the Act),1 seeking Commission consent to the transfer of control of the licenses, authorizations, and spectrum leases held by Sprint and its subsidiaries to T-Mobile, and the pro forma transfer of control of the licenses, authorizations, and spectrum leases held by T-Mobile and its subsidiaries in furtherance of T-Mobile’s and Sprint’s previously announced agreement to merge. T-Mobile also filed a petition for declaratory ruling to permit foreign ownership in excess of the statutory benchmark under section 310(b) of the Act.3 2. As the two smallest nationwide mobile service providers, T-Mobile and Sprint assert that their combination will enable the deployment of a world-leading 5G network with capabilities beyond those either could achieve alone. Although each company had independent 5G plans, they claim that on their own they lack the capability to deploy 5G as broadly and with as much capacity as the resulting combined company, New T-Mobile, would. They maintain that their combined scale will increase network efficiency and that Sprint’s mid-band spectrum will complement T-Mobile’s low-band spectrum, further increasing the quality of their combined network. T-Mobile and Sprint also claim that these and other synergies will enable the merged firm to compete more effectively against the market leaders, AT&T and Verizon Wireless, than could either firm individually. As a result, they argue, the transaction would not result in the lessening of competition often associated with consolidation between horizontal competitors.

At the end of the day, we believe that it is likely, even without conditions, that these competitive benefits will outweigh pricing pressure in certain areas, such as rural markets, and in certain segments of the market, such as consumers who are primarily quality-conscious. However, we are not confident that this will be the case across the board. In particular, based on the record, we are concerned about the impact of an unconditioned transaction on consumers in densely-populated areas who are primarily concerned about cost. Accordingly, we require, as a condition of our approval, that the Applicants fulfill a series of commitments to address the potential for lost price competition, such as the divestiture of Boost Mobile.13 These conditions eliminate the concerns otherwise identified in our review. Among other requirements, the Applicants have committed that the divested Boost Mobile will have lowcost wholesale network access on terms superior to typical MVNOs, with the financial incentive to provide robust competition from the moment of divestiture, and with the ability to build its own facilities over time. We conclude that, as conditioned, the transaction would not substantially lessen competition,14 and would be in the public interest.

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