T-Mobile USA deal for MetroPCS glides through FCC

The agency let the merger go through without a vote of its commissioners

The merger between T-Mobile USA and MetroPCS moved one step closer to completion on Tuesday as the FCC approved the deal without conditions.

In what may be a hopeful sign for backers of the deal, the agency's review didn't even rise to the commissioners themselves. Instead, the FCC's Wireless Telecommunications Bureau approved the transfer of spectrum licenses from the two carriers to the new company being formed in the deal. The FCC didn't impose any conditions, such as the forced sale of assets, as it has with some other proposed carrier mergers.

The boards of the two companies agreed to the merger last October, announcing a deal in which T-Mobile parent Deutsche Telekom would give MetroPCS shareholders US$1.5 billion and 26 percent of the new company. Last week the deal passed what could have been another major regulatory hurdle as the U.S. Department of Justice allowed a waiting period to pass without opposing the merger.

MetroPCS shareholders still have to approve the transaction. They are scheduled to vote on April 12. On Tuesday, MetroPCS sent a letter to its shareholders urging them to vote in favor, countering some shareholders' criticism of the terms of the deal.

Adding MetroPCS would strengthen T-Mobile, the fourth-largest U.S. mobile operator, by boosting its subscriber base from 33 million to 42 million. The combined entity will also have more spectrum with which to build out a competitive LTE network. T-Mobile's closest rival, third-place Sprint Nextel, is working through proposed deals of its own that would put it under the umbrella of Japanese carrier Softbank and would give it full ownership of partner Clearwire. Those plans still face some hurdles.

The prospect of strengthening rivals to AT&T and Verizon Wireless, which dwarf their nearest competitors, is expected to help pave the way for T-Mobile's and Sprint's plans.

"I am hopeful that the wireless license transfer approved today will result in a stronger fourth nationwide wireless carrier and will bring more competition to the market," FCC Commissioner Jessica Rosenworcel wrote in a statement on Tuesday. "By allowing these two market disrupters to join forces and harmonize their spectrum holdings, today's action should ultimately lead to more choices and lower prices for consumers."

The last merger proposal involving T-Mobile, which would have seen it swallowed up by AT&T, was scuttled in late 2011 after opposition from both the FCC and the Justice Department.

The Communications Workers of America, which supported the AT&T deal, had called for a full FCC review of the T-Mobile-MetroPCS proposal. In a filing to the Commission on Monday, the union said the carriers hadn't given credible assurances that they wouldn't cut jobs after merging. Rosenworcel also raised job concerns in her statement but said the companies had pledged not to close domestic call centers or retail stores and said they would increase employment.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

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Tags business issuestelecommunicationCarriersregulationMetroPCS WirelessU.S. Federal Communications CommissionmobilegovernmentT-Mobile USAMergers and acquisitions

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Stephen Lawson

IDG News Service
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