T-Mobile’s $35 million payoff to CETF was done properly and “adds weight” to its case, CPUC judge rules

by Steve Blum • , , , ,

Beautiful friendship

The $35 million deal to gain the California Emerging Technology Fund’s (CETF) support for T-Mobile’s merger with Sprint was done properly. That’s the ruling from Karl Bemesderfer, the administrative law judge managing the California Public Utilities Commission’s review of the transaction.

The contract, which also contains a long list of vague promises previously floated by T-Mobile, was challenged by the CPUC’s public advocates office (PAO) and two consumer groups, TURN and the Greenlining Institute. Generally, they objected to the way it was handled, arguing that T-Mobile and CETF should have used the CPUC’s formal settlement process, which would offer them a chance to ask for more details and, if they choose, object to it.

Instead, CETF and T-Mobile (and technically Sprint, but it’s T-Mobile that’s running the show) negotiated their deal and then submitted it to Bemesderfer, along with a request from CETF to be allowed to change sides in the case and “enthusiastically and wholeheartedly support” the merger. He said that’s how it’s been done at times in the past, so the agreement can be used to support T-Mobile’s push for CPUC approval of the Sprint merger, but that’s all…

However, all parties should be aware that granting the Motion merely permits CETF and Joint Applicants [T-Mobile and Sprint] to enter their MOU into the record of this proceeding and changes the litigation position of CETF from opposing the Sprint-T-Mobile merger to supporting it. Granting the motion does not pre-judge the question of whether the merger is in the public interest though it adds weight to the argument of Joint Applicants for that conclusion.

Bemesderfer is yet to rule on a flurry of motions filed in the past week. TURN and Greenlining either want the CETF deal excluded from consideration, or be given more time to offer a rebuttal. No decision yet on that request, but Bemesderfer’s latest ruling might be read as an indication of where it’s heading. Also pending are a motion by the PAO to exclude T-Mobile’s not very detailed offer of 1,000 new jobs at a Central Valley call center if the merger is completed, and another request by Sprint and T-Mobile for the CPUC’s immediate approval.

At this point, the only immediate action to expect is another weekend with plenty to read – rebuttal arguments from all sides are due later today. Assuming all goes to plan, I’ll post an update on that on Monday.

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