Most investors had been led to believe that the proposed acquisition of Sprint Corp. (NYSE: S) by T-Mobile US Inc. (NASDAQ: TMUS) would be blocked. While this will not act as a final verdict for the measure, the Federal Communications Commission (FCC) has indicated a more favorable position for the proposed merger.

According to the FCC statement from Chairman Ajit Pai, the two companies have committed to taking a series of significant steps if their merger application is approved. In this effort, the FCC’s top priorities concern closing the digital divide in rural America and also advancing the U.S. leadership position in 5G. Pai indicated that T-Mobile and Sprint have committed to substantially advance each of these critical objectives. There is also a pricing concession here.

Again, most investors have assumed that this merger was going to be blocked, despite the notion that Sprint might not even exist as a profitable carrier as it is burdened by much heavier debt levels than its peers. At one point, the Sprint brand was expected to disappear in 2019.

Some hurdles to the merger process may remain, but it may be viewed as a positive force for the profitability of the entire U.S. wireless carriers.

The FCC has opened a proceeding to consider the T-Mobile and Sprint merger on June 15, 2018. Monday’s statement indicated that Pai will be presenting a draft order to his colleagues that would resolve this matter:

In light of the significant commitments made by T-Mobile and Sprint as well as the facts in the record to date, I believe that this transaction is in the public interest and intend to recommend to my colleagues that the FCC approve it. This is a unique opportunity to speed up the deployment of 5G throughout the United States and bring much faster mobile broadband to rural Americans. We should seize this opportunity.

As far as the specific commitments for prices, which was perceived as the largest concern that the public should have, on top of their prior commitment not to raise prices for three years, T-Mobile and Sprint also have decided to divest Boost Mobile in an effort to address potential competitive issues that have been identified in the prepaid wireless segment. Pai noted:

It’s also important that the companies would suffer serious consequences if they fail to follow through on their commitments to the FCC. These consequences, which could include total payments to the U.S. Treasury of billions of dollars, create a powerful incentive for the companies to meet their commitments on time.

Sprint closed at down on Friday, but the shares popped 26% shortly after the opening bell on Monday, and were still up more than 24% by midday. More than six times an average day’s trading volume had been seen by the noon hour.

Shares of T-Mobile were last seen up almost 6% to $79.75, and its trading volume was more than three times the daily average.

The FCC statement indicated that both Sprint and T-Mobile committed to deploying a 5G network that would cover 97% of the U.S. population within three years of the closing of the merger, and it would cover 99% of Americans within six years of the closing. It was also shown that the future 5G network would cover 85% of rural Americans within three years and 90% of rural Americans within six years. An additional concession was that the companies have guaranteed that 90% of Americans would have service speeds of at least 100 Mbps and 99% would have access to speeds of at least 50 Mbps.

Pai said:

The construction of this network and the delivery of such high-speed wireless services to the vast majority of Americans would substantially benefit consumers and our country as a whole. I’m also pleased that the companies have committed to a robust buildout of their mid-band spectrum holdings. 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.

This was one of those rare days when Sprint trades more than 100 million shares, this time by noon.

To support the notion that the profitability for the entire wireless segment might be better with three players trying to undercut each other for their overall share of the wireless offerings in America, AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) were both higher early Monday as well.

AT&T Inc. (NYSE: T) was up less than 2% at $32.37 in the noon hour Monday. It has a 52-week range of $26.80 to $34.53.

Verizon Communications Inc. (NYSE: VZ) was last seen up more than 2% at $59.35, and its 52-week trading range was $47.13 to $61.58.

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