Tech

FCC votes to approve T-Mobile and Sprint merger, but the deal still faces a legal challenge from states

Key Points
  • On Wednesday, the Federal Communications Commission voted 3-2 along party lines to approve the merger of T-Mobile and Sprint.
  • The FCC's vote is one of the final steps for the deal to go through, barring the state attorneys general lawsuit that seeks to block it.
  • T-Mobile and Sprint have argued that the merger would allow them to compete more effectively on 5G.
T-Mobile CEO John Legere (L) and Executive Director of Sprint Marcelo Claure pose for photographs before testifying to the House Judiciary Committee's Antitrust, Commercial and Administrative Law Subcommittee in the Rayburn House Office Building on Capitol Hill March 12, 2019 in Washington, DC.
Chip Somodevilla | Getty Images

The Federal Communications Commission voted Wednesday to approve the merger between T-Mobile and Sprint, providing one of the final sign-offs on the $26 billion deal, an FCC official confirmed.

The commissioners voted 3-2 along party lines, with Chairman Ajit Pai and the two Republican commissioners approving and the two Democratic commissioners voting against the deal.

The merger gained Justice Department approval in July, but it still faces a legal challenge from a team of state attorneys general seeking to block the deal. T-Mobile and Sprint have argued that combining their companies, the third- and fourth-largest U.S. wireless carriers, would give them the ability to compete aggressively with AT&T and Verizon on 5G technology. But the state attorneys general involved in the lawsuit argue that the merger will reduce competition and drive up prices for customers.

Democratic FCC Commissioner Jessica Rosenworcel released a statement following the vote objecting to the approval.

"We've all seen what happens when markets become more concentrated after a merger like this one," Rosenworcel said, pointing to baggage fees on airlines and high drug prices from pharmaceutical companies. "There's no reason to think this time will be different. Overwhelming evidence demonstrates that the T-Mobile-Sprint merger will reduce competition, raise prices, lower quality, and slow innovation."

Remedies meant to reduce harm from the deal will not be enough "to save consumers from the problems with this merger," Rosenworcel said. In approving the deal, the Justice Department ordered Sprint to divest certain interests including Boost Mobile and some wireless spectrum and T-Mobile must make its network accessible to Dish Network for seven years, among other stipulations. T-Mobile and Sprint made commitments to the FCC to help deploy 5G networks across the U.S. if their merger was approved, such as agreeing to deploy a 5G network covering 97% of the U.S. population within three years of the deal's close.

"With 5G on the horizon, our dependence on wireless connectivity is bound to grow," Rosenworcel said in the statement. "It's not the time to count on ineffective deployment commitments, higher prices, and less vigorous competition to help the benefit of this new technology reach us all."

There were no statements from the FCC commissioners who voted to approve the merger.

Sprint declined to comment. T-Mobile did not immediately respond to a request for comment.

The companies face their next hurdle in December, when they go to trial with the state attorneys general.

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