Dive Brief:

• Federal Communications Commission (FCC) Chair Ajit Pai's endorsement of the proposed merger of T-Mobile and Sprint clears a major hurdle for the deal.
• In a statement, Pai said the companies' promise of building a 5G network that they claim will cover 97% of the country’s population within three years of the merger was a major reason for his support. He said that would help close the digital divide and advance the United States' international leadership on 5G. FCC Commissioner Brendan Carr followed up with a statement of support the same day, saying the merger would encourage "more competition" and accelerate the build-out of 5G.
• The merger still needs the formal approval of the FCC and the U.S. Department of Justice (DOJ), which has not said publicly whether it will oppose the deal on antitrust grounds. State attorneys general could also challenge the merger.

Dive Insight:

Since it was announced almost a year ago, the proposed merger of two of the country’s major telecom companies has been the source of controversy and criticism from elected officials and consumer protection groups. Pai’s announcement has already come under fire from FCC Commissioner Jessica Rosenworcel, who said on Twitter that she has "serious doubts" about the consolidation plan.

We've seen this kind of consolidation in airlines and with drug companies. It hasn't worked out well for consumers. But now the @FCC wants to bless the same kind of consolidation for wireless carriers. I have serious doubts. https://t.co/Yh4DC0C134

— Jessica Rosenworcel (@JRosenworcel) May 20, 2019

T-Mobile and Sprint have tried to quell some of those concerns with commitments to creating an "unprecedented, world-leading, nationwide 5G network," in addition to previous promises of high-speed 5G home internet under their new moniker of "New T-Mobile." But a swath of leaders have criticized the merger as anti-consumer, and a move that will push prices up.

In a statement, Gigi Sohn, a former counselor to former FCC Chair Tom Wheeler, described the merger as containing "unenforceable promises" that do "no more than put lipstick on a pig."

Free Press, which advocates for equitable media access, released a statement noting concerns around access for low-income communities. The merger would hurt "low-income populations, communities of color and anyone seeking a more affordable price for essential wireless communications," said Matt Wood, the group's vice president of policy and general counsel. 

The promise of near-universal 5G coverage appears to be a convincing argument to some FCC commissioners, who are faced with a continuing digital divide between rural and urban areas that some have said could be solved by the technology.

And with the United States determined to stay equal to or ahead of China and South Korea in 5G deployment, the companies' pledge to boost the country's leadership will be music to the ears of elected officials. But antitrust concerns remain, despite Carr's claim that the merger will mean "more competition."