The Federal Communications Commission today approved the merger of T-Mobile and MetroPCS, finding that the deal will not adversely affect wireless competition and help expand 4G LTE across the U.S.

The Department of Justice approved the deal last week. MetroPCS stockholders will vote on it during an April 12 meeting.

"Based on the record before us and our review of the competitive effects of the proposed transaction, we find that approval of the transaction will serve the public interest," the FCC concluded.

"With today's approval, America's mobile market continues to strengthen, moving toward robust competition and revitalized competitors," FCC Chairman Julius Genachowski said in a statement.

MetroPCS and T-Mobile announced plans to merge in October. Under the deal, MetroPCS will make a cash payment of $1.5 billion to its shareholders for a 26 percent ownership in the combined company; Deutsche Telekom will own 74 percent.

The merger raised "horizontal competition issues" because it covered overlapping mobile wireless coverage in certain areas and the transfer of customers from previously competing firms into a new company. But ultimately, the FCC found that the benefits outweighed the negative, particularly the potential for expanded 4G LTE coverage.

"We anticipate that the combination of T-Mobile USA and MetroPCS would enable the deployment of a substantial LTE network nationally that would enhance competition and provide important benefits for consumers," the commission said. "By merging the two companies, and their network assets and spectrum, we find that the resulting [firm] would provide for a broader, deeper, and faster LTE deployment than either company could accomplish on its own."

"Existing MetroPCS customers would have access to a more robust, national network and a broader array of service and handset options. Consumers outside of MetroPCS's current limited service area will have the benefit of the MetroPCS service plans becoming available as an additional option," the FCC continued. "T-Mobile USA customers would experience improved service quality, particularly in major metropolitan markets in which the existing TMobile USA and MetroPCS networks would be combined."

The commission also found that the combined T-Mobile/MetroPCS would help boost T-Mobile's ability to compete against the other top carriers in the U.S.: Verizon, AT&T, and Sprint. But even with MetroPCS, it would still be in fourth place with 42 million subscribers; third place Sprint has about 56 million. The combined company would also only lead in two U.S. markets: Miami-Fort Lauderdale and Monroe County, Florida. But they'd still have less spectrum than their rivals.

"We find it unlikely that [T-Mobile and MetroPCS] would have the ability to unilaterally raise price or otherwise harm competition at the national level," the FCC concluded. "T-Mobile and MetroPCS have long been "disruptive influences or 'mavericks,' and moreover, [the combined company] would have an economic incentive to continue to play this role."

The FCC was also not concerned about the role of the German government in the case; the Federal Republic of Germany (FRG) and the Kreditanstalt für Wiederaufbau (KfW) bank would hold a 32 percent voting interest in the new company given their investment in DT. Any new foreign investor, however, would be capped at 25 percent.

In the wake of the DOJ approval, there were reports that T-Mobile USA employees at the carrier's headquarters in Bellevue, Wash. were preparing for layoffs. In comments filed with the FCC, the Communications Workers of America (CWA) expressed concern about possible layoffs should the T-Mobile/MetroPCS merger proceed, but the FCC said it was "not persuaded."

"The FCC's approval marks another significant milestone in bringing our two companies together, and we appreciate the Commission's timely approval. We look forward to completing the transaction and delivering the significant customer and stockholder benefits that this combination will make possible," John Legere, president and CEO of T-Mobile, said in a statement. "Our combined company will have the products, spectrum, scale and resources to shake up this industry and deliver an entirely new wireless experience."

Roger D. Linquist, CEO and chairman of the board of MetroPCS, said he was pleased by the FCC's decision. "We thank the FCC for its prompt review of our proposed combination with T-Mobile, which will create the value leader in the United States wireless marketplace."

For more, see MetroPCS Subscriber? What the T-Mobile Merger Means to You and T-Mobile Subscriber? How the MetroPCS Merger Will Affect You.

Sascha Segan contributed to this report.

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