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Policy Media/Telecom

FCC Chair Endorses Sprint—T-Mobile deal

The proposed merger of Sprint and T-Mobile got a big boost after Federal Communications Commission Chairman Ajit Pai offered his support for the deal. It was an unexpected endorsement that Mr. Pai linked to the combined company’s potential impact on the build-out of high-speed, 5G networks and broadband access in rural areas. Mr. Pai said that potential outweighed concerns the merger would weaken competition in the wireless industry.

It’s the second time the Trump administration has put the development of 5G ahead of antitrust concerns in recent weeks. Earlier this month, the Department of Justice’s antitrust division opined that any remedies imposed against Qualcomm by a court in a Federal Trade Commission lawsuit should not harm its ability to develop 5G technology. And that’s without taking into account the potential impact on the industry of Mr. Trump’s decision last week to bar Chinese telecoms equipment maker Huawei from the U.S.

However, Mr. Pai’s endorsement of the deal sets up a potential conflict with the Justice Department’s antitrust division, where staffers are reportedly opposed to the deal. It is highly unusual for the FCC and the DOJ to stake out opposing positions on a merger, especially in public. Perhaps of less concern to U.S. competition authorities, Mr. Pai’s support could also mark a change of fortune for SoftBank, which owns 80% of Sprint and is looking to the deal to reduce its overall debt levels.

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