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U.S. Business FCC chairman backs US$26.5-billion merger of T-Mobile and Sprint

Federal Communications Commission Chairman Ajit Pai said T-Mobile and Sprint would suffer 'serious consequences' if they don’t meet their FCC commitments.

The Associated Press

The chairman of the Federal Communications Commission says he plans to recommend the agency approve the US$26.5-billion merger of wireless carriers T-Mobile US Inc. and Sprint Corp., saying it’ll speed up 5G deployment in the United States.

FCC chairman Ajit Pai also said Monday that the combination will help bring faster mobile broadband to rural Americans.

“Two of the FCC’s top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity. The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives,” he said in a statement.

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Mr. Pai said the companies have committed to deploying a 5G network that would cover 97 per cent of the U.S. population within three years of the closing of the merger and 99 per cent of Americans within six years. In addition, 85 per cent of rural Americans would be covered within three years and 90 per cent covered within six years. T-Mobile and Sprint also guaranteed that 90 per cent of Americans would have access to mobile broadband service at speeds of at least 100 Mbps and 99 per cent would have access to speeds of at least 50 Mbps.

Mr. Pai said T-Mobile and Sprint would suffer “serious consequences” if they don’t meet their FCC commitments, including the possibility of having to pay billions to the Treasury Department.

Both the FCC and Justice Department must approve the deal. The companies argue that the combination will lead to better “5G” service, the next generation of wireless. They’ve also promised to create U.S. jobs and say they will compete with cable companies as well as Verizon Wireless and AT&T Inc. Public-interest and labour groups have raised concerns about wireless price increases and job cuts.

The Obama administration rebuffed the companies’ earlier effort to merge, as well as an attempted deal between AT&T and T-Mobile, on concerns that such deals would hurt competition in the wireless industry.

Shares of T-Mobile jumped as much as 7 per cent in early trading, while Sprint’s stock soared as much as 27 per cent.

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