California’s regulatory review of T-Mobile-Sprint deal has light years left to run

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The proposed purchase of Sprint by T-Mobile will get a thorough workover by the California Public Utilities Commission, and a final decision on whether or not to allow it won’t come until next summer. The commissioner running the review, Clifford Rechtschaffen, laid out the issues that he’ll investigate in a ruling on Friday.

Rechtschaffen had to decide how wide ranging his inquiry will be. Sprint and T-Mobile wanted it to be very narrow, and focus on two particular issues: could a relatively small Sprint subsidiary that does some wireline business in California be sold to T-Mobile, and could T-Mobile take over Sprint’s California mobile carrier registration. Technically, that’s just a simple notice that it has a federal license, but transferring it requires CPUC sign-off. As they tried to argue, both were matters of minor paperwork. These aren’t the droids you’re looking for, move along, move along.

Protests came from the usual suspects. TURN (aka The Utility Reform Network), the Greenlining Institute and Media Alliance – non-profit advocacy groups that rely heavily on “intervenor compensation” handed out by the CPUC – objected. So did the CPUC’s internal advocacy unit, the office of ratepayer advocates. They wanted the commission to review the whole merger, and all its potential impacts on Californians.

Rechtschaffen resisted the Jedi mind trick and sided with the protestors. He listed fourteen questions that have to be answered before the CPUC makes a final decision. The timeline he laid out says that will happen in June 2019.

The topics of those questions range from the merger’s competitive impact on mobile service and the fiber backhaul markets in California, whether or not innovation will be helped or harmed, and what, exactly, are the wonderful “efficiencies” that Sprint and T-Mobile promise will come our way if they’re allowed to combine. He’ll also consider the need for and the nature of “conditions or mitigation measures to prevent significant adverse consequences” that the CPUC might impose.

The public will be involved. Rechtschaffen plans to hold a series of public hearings in November and December, which will presumably be held in several locations around California. After that, both sides will file position papers, present evidence at a formal hearing, and submit their arguments and counter-arguments. Once that’s done – by mid-March – it’ll take about three months to produce, review and vote on a final decision. That’s the planned schedule, anyway. Much can happen that might speed up or, particularly, slow down the proceeding.