California still blocks the path to a T-Mobile Sprint merger

by Steve Blum • , , , ,

Caltrans flagger stop

The T-Mobile/Sprint merger ball is back in California’s court. Friday, T-Mobile, Sprint and DISH reached an agreement to shuffle assets and set the stage for a new, nationwide mobile network to emerge.

Maybe.

But that satisfied the anti-trust lawyers at the federal justice department.

It hasn’t done it yet for California attorney general Xavier Becerra or the California Public Utilities Commission, though.

Becerra is one of 13 state AGs who are backing a joint lawsuit in federal court, with the goal of blocking the merger as originally proposed. He’s still opposed, saying in a press release “DISH has never shown any inclination or ability to build a nationwide mobile network on its own and has repeatedly broken assurances to the Federal Communications Commission about deployment of its spectrum”.

The CPUC also has to approve the transaction, and its review has been going on for more than a year. Also on Friday, T-Mobile asked Karl Bemesderfer, the CPUC administrative law judge managing the case, to accept the federal government’s wisdom and then speedily approve the merger.

That won’t happen.

The CPUC dances to its own rhythm, and the next beat of the drum is two weeks away: opponents of the deal have that much time to respond to Friday’s motion. It’s not hard to guess what they’re going to say – just read the CPUC public advocates office’s objections to a substantially identical request to “advise the commission” of the endorsement of the merger by the Federal Communications Commission’s republican majority. The PAO argued then that decisions have to be based only on what’s in the CPUC’s official record, and the typical process for adding new information to the record takes weeks, if not months.

An hour before T-Mobile served its CPUC motion on Friday, the California Emerging Technology Fund (CETF) launched a lobbying campaign aimed at pressuring Becerra and the CPUC into “immediately” approving the deal. Back when this all started, CETF opposed the merger, but quickly flipped to enthusiastic support after receiving a $35 million payoff from T-Mobile.

Bemesderfer has leeway to shorten the process, or even under some circumstances to allow semi-informal consideration of new developments. He proceeds quickly when there’s a genuine need, but he doesn’t cut corners and he generally expects companies and their lawyers to take responsibility for properly making their own case. And he typically allows opponents a chance to respond.

Even if the CPUC gets out in front of Becerra (not a good bet) and approves the deal, a decision by September is very unlikely and October would be optimistic.

Collected documents from the CPUC’s review of the proposed merger of Sprint and T-Mobile are here.