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A merger between Sprint and T-Mobile might not face many hurdles at the Trump administration

A look at some past statements from FCC Chairman Ajit Pai.

FCC Chairman Ajit Pai shakes hands at his confirmation hearing. Chip Somodevilla / Getty

A potential merger of T-Mobile and Sprint could fare well with the Trump administration, which has telegraphed for months that it isn’t resolutely opposed to the combination of the country’s third- and fourth-largest wireless giants.

For years, the two companies have flirted with a tie-up, and while talks became particularly serious in 2014, Sprint-owner SoftBank pulled the plug amid threats from the U.S. government that it would block the deal in its tracks.

Under Trump, however, the Federal Communications Commission has reversed course and sought to deregulate the telecom industry. And the agency’s chairman, Ajit Pai, previously has said he doesn’t “take a preexisting view as to what the optimal market structure is” when it comes to the country’s four major wireless carriers: AT&T, Verizon, T-Mobile and Sprint.

“I don’t think any regulator who embraces regulatory humility and intellectual honesty about economics can say whether three or four or five [carriers] is the optimal number,” he told me on Recode Decode earlier this year. “What I do want to see is a competitive wireless marketplace.”

At the time, though, Pai declined specifically to address Sprint and T-Mobile’s plans. And the FCC again declined to comment Friday, citing the fact that no such merger has been officially presented to the agency for review.

Contrast that with Pai’s Democratic predecessor, former Chairman Tom Wheeler. In September 2014, the FCC leader — serving under since-departed President Barack Obama — stressed his agency’s chief goal was to “protect” competition. He added at the time: “Our effort opposing shrinking the number of nationwide wireless providers from four to three is an example.”

And Wheeler took the same message that month directly to the wireless industry’s own policy conference. “We will continue to be skeptical of efforts to achieve scale through the consolidation of major players,” he charged.

For now, at least, these are all merely hypotheticals. Sprint and T-Mobile haven’t even announced a deal — and that might not happen until October if reports from Reuters and others prove true. Only then will the merger come before the FCC, which must review it to determine if it’s in the public’s interest, as well as the Justice Department, which is charged with scrutinizing it on antitrust grounds.

Often, mergers that pose competition concerns outright aren’t blocked — they’re remedied through settlements with the combining companies that require them to adopt certain conditions, from protecting net neutrality to offering their programming on fair terms to competitors. There are rare instances, however, when the U.S. government has stood in the way of a major telecom transaction, such as the DOJ’s effort in 2011 to prevent AT&T from buying T-Mobile for $39 billion.

Initially, telecom companies seemed wary of Trump, as he sharply attacked companies like AT&T and Comcast for aspiring to grow larger. But the prevailing sentiment now is that the president’s populist rhetoric isn’t actually affecting the U.S. government’s antitrust policy. David Cohen, the leader of Comcast’s lobbying operation in Washington, D.C., said as much this week, telling Recode: “Overall, this president and this administration is likely less hostile to horizontal growth or even vertical growth in the telecom space and elsewhere.”

To be sure, there are other unknowns. The DOJ, for one, is lacking its top antitrust official; Makan Delrahim, nominated by Trump earlier this year, has not yet had his confirmation vote by the U.S. Senate. It’s still presumed, though, that the Trump administration is going to prove more permissive than its predecessor — a fact that folks like Masayoshi Son, the leader of Sprint’s parent, SoftBank, has tried to exploit in repeated meetings with Trump himself.

A merger between Sprint and T-Mobile could get another boost — at least symbolically — as soon as next week, when the FCC is set to vote on its annual assessment of the state of the wireless market.

A year ago, Wheeler’s FCC declined to rule that the wireless industry — even with four large nationwide carriers in AT&T, Verizon, T-Mobile and Sprint — was sufficiently competitive. But Pai’s agency, which took a snapshot of the telecom industry from 2016, plans to put up for a vote his own report finding that there “is effective competition” in the wireless marketplace.

The document does not address the potential for future mergers.


This article originally appeared on Recode.net.