T-Mobile's purchase of UScellular assets is delayed thanks to shorthanded FCC
T-Mobile cannot complete its purchase of UScellular assets due to staffing issues at the FCC.
When T-Mobile agreed in May 2024 to acquire UScellular's wireless customers, retail stores, and spectrum assets owned by the nation's fifth-largest wireless carrier for $4.4 billion in cash and debt, the thinking was that the deal would close in the middle of 2025. Well, perhaps you haven't noticed but we will hit the mid-way point of the year on July 2nd at 12 noon, and the transaction still hasn't received regulatory approval from the FCC.
The FCC currently has only two sitting commissioners including Chairman Brendan Carr and Anna M. Gomez. A quorum of at least three members is required before the FCC is allowed to resume normal operations. In case you're wondering the FCC is made up of five commissioners and no more than three can come from one political party. Each commissioner is appointed by the President and confirmed by the Senate. The commissioners are appointed to serve for a five-year term.
Since no mergers or acquisitions can be approved by the FCC without a quorum, Telephone and Data Systems, the company that is selling the UScellular assets, and T-Mobile, the buyer, are both unable to complete the transaction. T-Mobile is paying $2.4 billion in cash and will take over responsibility for $2 billion in UScellular debt. The deal also gives T-Mobile 30% of UScellular's spectrum assets including airwaves in the 600 MHz, 700 MHz A Block, PCS, AWS, 2.5 GHz, and 24 GHz (mmWave) frequencies.
The latest thinking has the T-Mobile-UScellular deal closing in August or September. The delay was caused when Democrat Commissioner Geoffrey Starks and Republican Commissioner Nathan Simington both left their posts in June. This left the agency one commissioner short of the necessary quorum. The sale of USM's spectrum to AT&T and Verizon is also on hold until the FCC regains its quorum. That could take place on July 1st when Commissioner Olivia Trusty will start her term as an FCC commissioner. Trusty was approved by the Senate 53-45 on June 17th. Her presence on the FCC will give the Republicans a 2-1 advantage at the FCC.
Once the FCC does regain its quorum, the agency will be able to vote on whether to approve T-Mobile's purchase of UScellular's assets and USM's sale of spectrum to AT&T and Verizon. Considering that T-Mobile received FCC approval for its $26 billion acquisition of Sprint during the first Trump administration, there shouldn't be an issue getting the UScellular transaction to close.
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