The Federal Communications Commission approved on Tuesday a proposed merger between Deutsche Telekom-owned T-Mobile and fifth-ranked wireless carrier MetroPCS. The approval was widely expected after the proposal sailed through approval at the Department of Justice last Wednesday.

Under the terms of the deal, MetroPCS will make a cash payout to its shareholders in the amount of $1.5 billion dollars, or roughly 26 percent of the company. Deutsche Telekom will own the remaining 74 percent.

"With today's approval, America's mobile market continues to strengthen, moving toward robust competition and revitalized competitors. We are seeing billions more in network investment, while the courts have upheld key FCC decisions to accelerate broadband build-out, promote competition, and benefit consumers, including our broadband data roaming and pole attachment rules. Today's action will benefit millions of American consumers and help the U.S. maintain the global leadership in mobile it has regained in recent years," said FCC Chairman Julius Genachowski.

Unlike last year's proposed acquisition of T-Mobile by AT&T, which failed to obtain regulatory approval, the MetroPCS deal is expected to benefit both consumers as well as the telecom industry.

While AT&T would have formed with T-Mobile the nation's largest carrier, the new deal is only expected to result in the fourth and fifth largest providers becoming the country's fourth largest carrier.

Though the deal is expected to help both companies become more competitive, particularly T-Mobile, it was not greeted warmly by all parties involved.

Following the announcement of FCC approval, shares of MetroPCS dropped 18 cents, to $10.32. Deutsche Telekom's shares dropped 8 cents, to $10.85.

MetroPCS's largest investor, Paulson & Co. has publically stated it intends to block the deal when it's up for shareholder approval. The company's founder, John Paulson, said in a letter in February that he believes the combined companies would share too much debt.