The Federal Communications Commission chairman expressed his support this week for the massive T-Mobile/Sprint merger after a promise from the two companies to provide 5G internet to rural areas.
Chairman Ajit Pai’s letter is a win for the pending $26 billion merger, and it could be a win for rural South Dakota.
In a government filing on Monday, T-Mobile and Sprint committed to outdoor 5G mobile coverage to 59.3 million rural residents and indoor coverage to 31 million rural residents.
The company promised within three years of the merger closing, they would deliver 50 Mbps or higher to two-thirds of the rural population in the U.S. and over 100 Mbps to over half of the rural population.
Then, six years after the merger closes, the new T-Mobile would deliver 50 Mbps or higher to 90 percent of the rural population and over 100 Mbps to 66.7 percent of the rural population.
They estimate the company will cover 90 percent of the rural population in the U.S. with low-band 5G coverage six years after the closing.
“Demonstrating that 5G will indeed benefit rural Americans, T-Mobile and Sprint have promised that their network would cover at least two-thirds of our nation’s rural population with highspeed, mid-band 5G, which could improve the economy and quality of life in many small towns across the country,” Pai said in his letter.
In a January 2019 report from Old Dominion University and University of South Dakota, 50.6 percent of people in South Dakota said speed and coverage of mobile phone service were somewhat of a problem and 6.3 percent said it was a major problem.
It’s not just mobile networks with a problem in the state. South Dakota lags behind neighboring states and more populated states when it comes to broadband internet. According to Broadband Now, there is estimated broadband coverage to 87.1 percent of South Dakota. Compare that to 93 percent of North Dakota.
The new T-Mobile has also made a promise in the regulatory filings to bring 5G in-home coverage to 9.6 million households across the country. They say 2.6 million rural households would be covered within three years of closing and 5.6 million within six years of closing.
The ODU/USD study found that bringing 5G mobile networks would deliver internet to much more of the state, at a lower cost.
“Based upon our review of economic and social conditions in South Dakota, we argue that investments in mobile networks are necessary to sustain economic growth and improve the quality of life of residents,” the report said.
If the new T-Mobile doesn’t follow through with its commitment, Pai said they would owe the U.S. government billions of dollars.
The FCC approval is just one hurdle for the merger. The Justice Department also has to make a decision to see if the combined company would hurt competition.
Sen. John Thune has working on 5G and rural broadband. He issued this statement to KELOLAND News:
“I’m closely monitoring this proposal, on which the DOJ and FCC have yet to formally decide. I have confidence in the leadership at both agencies, and I look forward to the conclusion of their reviews. I particularly appreciate and share FCC Chairman Pai’s commitment to ensuring American leadership in 5G and bringing the benefits of broadband access to rural areas, like those in South Dakota. If this merger is approved, I would expect the companies to meet or exceed their commitments to connect rural parts of our country.” -Sen. John Thune