Los Angeles Times

Telecom merger awaits FCC vote

GOP-led regulator is expected to approve T-Mobile-Sprint deal.

- Bloomberg

T-Mobile US Inc.’s proposed purchase of Sprint Corp. moved to a vote at the Federal Communicat­ions Commission, a step forward for the $26.5-billion deal that also calls on satellite-TV provider Dish Network Corp. to step up as a new wireless competitor.

FCC Chairman Ajit Pai asked colleagues to vote on the transactio­n, beginning a period of closed-door deliberati­ons that could last into late September. Pai voted for the deal, and the two junior Republican­s on the fivemember agency earlier expressed support, so approval is expected. Federal antitrust regulators cleared the deal July 26.

On Wednesday, Pai shared with colleagues the draft of an order that would approve the merger, according to a news release. As he did so, the chairman voted for the deal, said FCC spokesman Neil Grace.

Pai didn’t release the order publicly, but it contains a provision that would extend next year’s use-or-lose deadline for a trove of airwaves Dish has amassed over the years, according to a person familiar with the document. If the merger fails, Dish wouldn’t get the extension.

In July, Dish offered to build a wireless network and asked the FCC for the extension. That same month, Dish Chairman Charlie Ergen discussed the possibilit­y of not getting extra time, telling investors “we’d have time to start back up” with a less extensive network designed to satisfy regulators that the frequencie­s aren’t being held idle.

Pai’s action “brings us one step closer to formally aligning our goal of building the nation’s first standalone 5G broadband network with the FCC’s goal of rapid 5G deployment nationwide,” Jeff Blum, senior vice president at Dish, said in an email.

According to the FCC’s Wednesday news release, Dish’s plans are in the public interest — a term that signals approval is forthcomin­g. That would extend Dish’s deadline for using the airwaves by three years as it integrates Sprint’s Boost discount brand.

The merger faces a lawsuit from states that say it will raise prices by eliminatin­g a national carrier and reducing competitio­n.

On Wednesday, FCC Commission­er Jessica Rosenworce­l, a Democrat, indicated she was “not convinced” of the deal’s merits, saying in an email that “we need more competitio­n, not less.” Opposition from minority Democrats can slow but not stop the deal, Bloomberg Intelligen­ce analyst Matthew Schettenhe­lm said in a note. The Democrats can delay a vote until Sept. 25, but they may agree to move ahead before then, he said.

T-Mobile and Sprint are legally free to close their deal once they have FCC approval, but it’s unclear they would do so given the state litigation, Bloomberg Intelligen­ce analyst Jennifer Rie said in an Aug. 2 note. A trial in the case is set for December.

The transactio­n, which was proposed last year, would combine the thirdand fourth-largest nationwide mobile providers into a single rival to the establishe­d leaders, AT&T Inc. and Verizon Communicat­ions Inc.

Supporters say the combined company could quickly build an advanced 5G network, a priority of President Trump’s administra­tion. Critics have focused on losing Sprint as a separate force. To create an additional competitor, T-Mobile agreed to provide airwaves and discount brands such as Boost to Dish to help the satellite-TV company become a new, nationwide wireless provider.

“This transactio­n will bring fast 5G wireless service to many more Americans and help close the digital divide in rural areas,” Pai said in the news release.

The term 5G refers to fast next-generation wireless service, and the digital divide refers to poor broadband coverage outside metropolit­an areas.

The Justice Department, which cleared the merger last month, called the FCC’s action an “important milestone.”

“We are now one step closer to strengthen­ing competitio­n for high-quality 5G networks that will benefit American consumers nationwide,” Assistant Atty. Gen. Makan Delrahim of the antitrust division said in a statement.

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