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WHEN: Today, Monday, May 20, 2019
WHERE: CNBC's "Squawk Alley "
The following is the unofficial transcript of a FIRST ON CNBC interview with FCC Commissioner Brendan Carr on CNBC's "Squawk Alley" (M-F 11AM – 12PM) today, Monday, May 20th. The following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2019/05/20/fccs-brendan-carr-us-has-worlds-largest-5g-build.html.
All references must be sourced to CNBC.
JON FORTT: Shares of T-Mobile and Sprint rallying. You can see Sprint up 23 plus, 24%. T-Mobile up about 5.5%. The FCC Chair Ajit Pai giving a green light to their $26 billion merger saying it will speed up 5G deployment here in the U.S. Both the FCC and Justice Department must approve the deal, however. Joining us now, first on CNBC, FCC Commissioner Brendan Carr who also announced his support for that deal today. Commissioner, good morning.
BRENDAN CARR: Thanks for having me. I appreciate it.
JON FORTT: Well, I wonder how important were the specific promises that T-Mobile made to getting your support and also what is the enforcement mechanism? We're hearing about there being billions of dollars that T-Mobile has on the line if they don't roll out 5G in the manner and at the prices they promised. How do those penalties kick in if they slip?
BRENDAN CARR: That's right. One of the great session stories, I think, for the Trump administration and for the FCC is the leadership that the U.S. is showing when it comes to 5G. 5G is a great jobs story, it's great for our economic prosperity, and it's good for our national security. And the transaction before us with Sprint and T-Mobile, which I announced my support of today, well, the record there is very clear and it's part of that broader push to secure U.S. leadership in 5G.
JON FORTT: So about the enforcement, though, what's your understanding of how that will work? Is that something that needs to be in there for this to be a deal that you support?
BRENDAN CARR: Yes, so there was a filing this morning that T-Mobile made that walked through in a lot of detail the enforceable commitments they've put on the table and it walks through the mechanisms there. I think one thing that stood out from that filing is we're going to see 97% of the country covered with 5G within three years. When you think about U.S. leadership in 5G, one of our big goals is make sure every single community can benefit, not just the biggest cities. And this combination through that enforceable mechanism that's in that detailed filing is going to put us on that path.
MORGAN BRENNAN: Brendan, in terms of the supply chain for a 5G buildout in the U.S. given the fact there's so much focus on the executive order and the order from the commerce department in the past week around Huawei and what that will mean, to that 5G rollout here in the U.S., how robust is the competition here and how are you thinking about developing that supply chain?
BRENDAN CARR: Yes, so the security of the 5G network is also one of our top priorities. Just last week or two weeks ago we voted to prevent China Mobile, which is a company ultimately wholly owned by the People's Republic of China, from interconnecting with the U.S. You saw the Trump administration announce steps as well with respect to Huawei to make sure we have security in our supply chain. So, we're very focused on this issue and I think right now the leadership we're showing will hold us in good stead.
JON FORTT: Commissioner, do we have enough specifics on what security looks like? I mean, because to some extent the U.S. is still reliant on foreign suppliers for the 5G network whether you're talking about Samsung or about Ericsson. At what point can we draw the line and understand which foreign suppliers are delivering secure equipment and which are not?
BRENDAN CARR: Yeah, when we step back and think about that global competition for 5G, I mean, first and foremost is making sure it's built here and built with secure devices. And right now, the U.S. has the world's largest 5G build of any country. We're on pace to have over 40 cities this year. And the security proceedings that we have in place, and one idea we've put on the table, is potentially taking out equipment from certain vendors that's currently in the U.S. network but we haven't made a final decision at the FCC whether to take that step. We're also looking at whether there's review has can be put in place before new equipment goes into the network. And, frankly, making sure that people feel that they have choice in terms of the equipment that goes in and that companies that are deploying this network equipment share our western values in terms of respecting IP rights, respecting the first amendment. These are all steps we're looking at the FCC and the Department of Homeland Security is very involved in this effort as well.
CARL QUINTANILLA: Speaking of western values, Commissioner, I wonder how would you characterize our European allies' willingness to side with us or Huawei in this whole rift?
BRENDAN CARR: Yeah, the State Department, I let them speak for their efforts. They've been engaged in a lot of bilateral and multilateral conversations about the security threats. And I defer you to them as to the current state of play on those discussions.
MORGAN BRENNAN: Commissioner, I just want to get your thoughts in general over the next couple of years about how you're thinking about connectivity in the U.S. talking about 5G but you also have SpaceX, for example, poised to send satellites in orbit to build out its broadband network. Other situations like that also in development right now. What will it look like here in the U.S.?
BRENDAN CARR: Yeah, I think we're at an interesting time for consumers across the country. To your point, we're about to see a level of convergence that we've frankly only talked about before. That's part of the lens through which I looked at this particular transaction. Take the home broadband market, for instance. Right now, a lot of customers feel like they have one or no choice for high speed home internet. But with 5G, you can get wirelessly the same fiber-like speed that you can only get from one provider. You put on top of that, to your point, this new generation of low earth orbit satellites that are coming online and I think there's really going to be really more choice than ever for consumers when it comes to high speed internet access and that's going to be a great thing.
JON FORTT: Yeah, potentially competition for broadband providers. Traditional ones, as well. Commissioner Brendan Carr from the FCC, thank you.
BRENDAN CARR: Thanks.
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