T-Mobile preps to bypass CPUC, close Sprint deal before California review complete

by Steve Blum • , , , ,

Tmobile billboard las vegas 6jan2020

A stack of motions from T-Mobile (and Sprint, but it’s T-Mobile leading the parade) landed at the California Public Utilities Commission on Tuesday. On the face of it, the four filings (links below) ask the CPUC to wrap up its review of the T-Mobile/Sprint merger in time for the deal to close on 1 April 2020. As it stands, the CPUC is running on a schedule that has a final vote set for 16 April 2020, following publication of a proposed decision by 13 March 2020.

The motions set the stage for T-Mobile to either ask a state or federal court to clear the path for the merger, or to simply ignore the CPUC and close the transaction without its blessing. Typically, judges won’t intervene in a regulatory agency’s business until administrative options – such as asking for reconsideration of a decision – have played out.

The arguments presented are the same as those made to CPUC commissioners earlier in a lobbying blitz by T-Mobile, the California Emerging Technology Fund (CETF), which flipped from opposing the merger to actively working on T-Mobile’s behalf after extracting a $35 million payoff, and DISH, which similarly switched sides when it got a piece of the action. It would be an extraordinary step for commissioners to reverse a ruling made by an administrative law judge while a decision is being drafted. It’s even more unlikely that they would do so on the basis of rehashed rhetoric. The four motions tick the exhaust all administrative remedies box, but do little else.

T-Mobile also reiterated its position that it doesn’t need CPUC permission to take over Sprint’s mobile business, and that the relatively trivial matter of transferring Sprint’s California wireline certification isn’t controversial enough to warrant all the regulatory attention it’s getting…

The Commission has explicitly exempted wireless carriers from obtaining preapproval for transfers of control under [California public utilities law] and otherwise lacks jurisdiction to require such preapproval. Moreover, there is no real dispute that the wireline transfer application clearly satisfies the standard for wireline transfers of control.

There’s no requirement for commissioners or Karl Bemesderfer, the administrative law judge managing the case, to respond to T-Mobile’s request in any particular timeframe or, indeed, at all.

T-Mobile and Sprint (aka Joint Applicants) CPUC motions, 3 March 2020
Motion of Joint Applicants for Reconsideration of the Presiding Officer’s Ruling Revising Schedule
Motion of Joint Applicants to Shorten the Review and Comment Periods for Proposed Decision
Motion of Joint Applicants to Shorten Time to Respond to the Motion for Reconsideration of the Presiding Officer’s Ruling Revising Schedule
Motion of Joint Applicants to Shorten Time to Respond to the Motion of Joint Applicants to Shorten the Review and Comment Periods for Proposed Decision

Links to arguments and exhibits filed at the CPUC and elsewhere are here.

My clients include California cities who do business with T-Mobile. I like to think that has no bearing on my commentary. Take it for what it’s worth.