Tag Archives: DISH

T-Mobile tells CPUC it does not “intend to address DISH’s fitness” in Sprint merger review

by Steve Blum • , , , ,

The Federal Communications Commission formally approved T-Mobile’s takeover of Sprint on Wednesday, but California’s blessing (or not) will almost certainly wait until sometime next year. How far into next year the California Public Utilities Commission’s review of the merger goes will depend on whether T-Mobile’s plan to transfer people, spectrum, stores and cell sites to DISH, to create a new U.S. mobile carrier to replace Sprint as a fourth competitor in the market, is deemed relevant.

T-Mobile’s lawyers think it’s irrelevant, and don’t want to cooperate if the CPUC’s inquiry heads in that direction. In a very small print footnote, in an email sent yesterday to the administrative law judge (ALJ) managing the CPUC’s inquiry, T-Mobile’s lead California attorney Suzanne Toller said…

Joint Applicants [T-Mobile and Sprint] do not intend to address DISH’s fitness as a wireless provider or its viability as a fourth competitor, as those matters are not properly within the scope of these proceedings.

The “scope of these proceedings” is still to be determined. ALJ Karl Bemesderfer must decide if he will allow opponents of the merger to challenge T-Mobile’s claim that its arrangement with DISH and other aspects of its settlement with the federal justice department’s anti-trust unit have no meaningful effect on the California wonderfulness of the Sprint merger. He framed it, in part, as a due process question during a hearing last week, and indicated he was considering a request made by opponents, with specific attention to DISH’s capabilities and intentions, for several months of additional testimony, rebuttal and arguments.

Lawyerly bluster aside, the “properly” bit seems to be at the base of the vague threat to ignore Californian proceedings that T-Mobile’s legal team floated at the hearing. If the effect of the merger on competition in California’s broadband market is “properly” within the CPUC’s jurisdiction, then DISH is fair game and T-Mobile will have to wait for a decision. If the question is completely in the hands of federal agencies, then we already have the answer.

Links to the stack of arguments and exhibits everyone has filed are here.

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

With or without California’s approval, T-Mobile looks for quick consummation of Sprint merger

by Steve Blum • , , , ,

Tmobile san francisco 18may2019

Does DISH matter? That’s the question that’ll determine whether the California Public Utilities Commission makes a (relatively) fast decision to allow T-Mobile to acquire Sprint. If it doesn’t, lawyers for T-Mobile and its allies hinted that the deal might move ahead without Californian conditions or, indeed, permission.

Yesterday, CPUC administrative law judge Karl Bemesderfer listened to arguments from lawyers on T-Mobile’s side who pressed for a quick end to the case, and from opponents of the deal who pushed for lengthy, formal litigation. At issue is T-Mobile’s (and Sprint’s, but T-Mobile is running the show) proposal to shift people, spectrum and real estate to DISH, and create a new, fourth competitor in California’s mobile broadband marketplace.

That agreement was reached with anti-trust lawyers working for the federal justice department, after the CPUC’s nearly year-long inquiry was closed. T-Mobile’s ace legal team asked Bemesderfer to “take notice” of the settement, which led him to formally re-open the record and, perhaps, restart a process that could run until sometime next spring.

At the end of the 80 minute “pre-hearing conference” – CPUC-speak for a hearing to decide if there’s going to be a hearing – Bemesderfer cut to the chase…

Both sides have raised, I think, quite compelling points. Joint applicants have made the case that the California-only commitments have not been altered by the post closing-of-the record events in Washington. And I also think joint intervenors have made a case that they have a due process right to test that proposition…

I thank you all for coming and supplying me with your thoughts, and I will go think about this for a while and then I’ll supply you with mine.

Then there’s the vague threat T-Mobile’s lawyer floated about what might happen if the CPUC is the last regulatory agency in the U.S. that doesn’t approve the deal. Suzanne Toller said that it would raise “a number of some very interesting questions about the scope of the commission’s jurisdiction” over T-Mobile, Sprint or any other mobile carrier.

Translation: jam us up and we’ll jam you up in federal court.

Rachelle Chong, a lawyer representing the California Emerging Technology Fund, which flipped from opposing the deal to enthusiastically supporting it after accepting a $35 million payoff honorarium from T-Mobile that it can only cash in if the deal goes through, put it more bluntly. She expressed “very serious concern” about what would happen “if T-Mobile were to pack up its bags and leave California because it can’t get its approvals for this deal”.

Translation: T-Mobile won’t give us the money. Its other California-specific commitments are toast too.

There’s no chance T-Mobile will turn off its network in California, but there’s a real possibility that it can get a federal (or even Californian) judge to say the CPUC is out of bounds. At that point, all promises are off the table.

There’s no particular timeline for Bemesderfer to issue a decision, but a week or two wouldn’t be a crazy guess.

Links to the stack of arguments and exhibits everyone has filed are here.

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

T-Mobile/Sprint merger review might go longer and harder in California, as DISH’s act is questioned

by Steve Blum • , , , ,

The California Public Utilities Commission should get the dish on DISH, before deciding whether T-Mobile’s proposed takeover of Sprint “would serve the public interest”, according to a protest filed yesterday by a coalition of opponents to the deal. The group includes the CPUC’s public advocates office, two consumer advocacy groups and the Communications Workers of America, the primary telecoms union in California. To do that, they propose a schedule of testimony and arguments that would bump any decision on the merger until sometime next spring.

T-Mobile refiled its application for CPUC approval last month, after its deal with Sprint was extended to include spinning off assets to DISH in order to maintain sufficient competition in the mobile services marketplace. Or so the federal justice department believes. DISH owns a considerable amount of mobile spectrum, but hasn’t put it to use yet – it’s primarily a satellite TV outfit, not a telecommunications network operator or service provider.

Under the new agreement, DISH gets spectrum, cell sites and retail outlets from T-Mobile and Sprint, so it can eventually build its own network. In the meantime, it would lease capacity from T-Mobile, and resell it under its own brand name – become what’s known as a mobile virtual network operator (MVNO). In their protest, the opponents questioned whether DISH is capable of fulfilling those promises…

This Proposed Transaction dissolves the fourth main wireless carrier and proposes the creation of a possibly inferior substitute to become a new fourth carrier. This could have profound impacts on competition, jobs, and quality of service, among other things. Especially, the Commission should examine whether approving the [deal with DISH] and creating a new wireless carrier is more beneficial to California than simply keeping Sprint as a strong and viable fourth carrier.

  • Is DISH, as [an MVNO] operating on New T-Mobile’s network for the first several years of the settlement, an adequate replacement for Sprint to serve customers in the prepaid market?
  • Can a client MVNO, new to the mobile wireless market, realistically be expected to provide the same level of competitive check that Sprint, a competitive Mobile Network Operator (MNO), currently exerts on T- Mobile?

There are more questions in the full document, but one they didn’t ask and should have was is DISH any more serious about this promise than it was about past pledges to build a mobile network?

T-Mobile, along with everyone else, is scheduled to meet later today with the CPUC administrative law judge managing the case. They’ll talk about next steps.

Links to the stack of arguments and exhibits everyone has filed are here.

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

T-Mobile waters down California job pledge as it refiles for Sprint merger permission

by Steve Blum • , , , ,

Tmobile san francisco 18may2019

T-Mobile (and Sprint, but it’s T-Mobile running the show) refiled and amended its application for merger approval with the California Public Utilities Commission on Thursday, as directed by the administrative law judge managing the case. Generally, the changes add a bit more detail about how the settlement T-Mobile reached with the federal justice department’s antitrust enforcers changes the promises it made to the CPUC earlier in the proceeding.

The core of the settlement involves transferring most of Sprint’s prepaid customers, along with retail outlets, cell sites and spectrum, to DISH, in order to create a new competitor in the mobile broadband market. The new commitments in the amended application boil down to we’re not making any promises about what DISH will do with the stuff.

Or with the people. Since some of Sprint’s employees –“prepaid asset personnel” – will be offered as a sacrifice to DISH, T-Mobile is removing them from its “voluntary commitment” to “extend job offers with comparable pay and benefits to all California Sprint and T-Mobile retail employees”.

If you read between the lines, though, it’s also possible – probable, if you assume T-Mobile’s lawyers use weasel words for a reason – many Sprint and/or T-Mobile employees will end up out of work, whether or not they’re being shopped to DISH.

On the one hand, T-Mobile originally promised “the total number of New T-Mobile employees in California three years after the close of the transaction will be equal to, or greater than, the current total number of Sprint and T-Mobile employees in California”. The amended application removes the “prepaid asset personnel” from that commitment and restates it as “no net job loss”, which indicates that the “or greater than” is weaselly worded indeed.

On the other hand, T-Mobile says it will create “approximately one thousand new jobs at a new customer experience center located in California’s Central Valley”.

Do the math. If T-Mobile adds a thousand people in Kingsburg, in Fresno County, and its Californian head count will be the same in three years as it is now, a thousand employees will have to make a career change. That might be a sound business decision, but it’s not the storyline T-Mobile is hoping the CPUC will buy into.

The next milestone in the CPUC’s lengthening review of the T-Mobile/Sprint merger is a hearing to consider what additional issues need to be addressed, and what the schedule for doing that will be. Given typical procedural timelines at the CPUC, a final decision isn’t likely until next year, perhaps some time in the first three months or so.

Links to the stack of arguments and exhibits T-Mobile and Sprint filed on Thursday are here.

T-Mobile’s California boomerang hits home, Sprint merger decision delayed for months

by Steve Blum • , , , ,

Mad max boomerang hit

Another round of brilliant lawyering by T-Mobile’s ace legal team has pushed back approval (or not) of its acquisition of Sprint by the California Public Utilities Commission until late this year or, maybe, sometime in 2020. Yesterday, CPUC administrative law judge Karl Bemesderfer ruled that the settlement T-Mobile, Sprint and DISH reached with the federal justice department should, as requested, be considered during California’s regulatory review of the merger. But not, as T-Mobile oddly argued, with blind faith in the wisdom of the Trump administration’s anti-trust team.

Bemesderfer said, in effect, yeah, it matters and thanks for mentioning it

A motion “to inform the Commission” of an action by a separate government body is not well-formed, but rather than reject it out of hand I have chosen to interpret it as a motion to re-open the record…

Because the [settlement documents submitted by T-Mobile and Sprint] appear to fundamentally change the Transaction, I agree with [T-Mobile and Sprint] that this proceeding will have a radically incomplete record on which to base a decision unless I re-open the record to admit them. But I also agree with [the CPUC public advocates office and the Communications Workers of America] that if I re-open the record…I must order [T-Mobile and Sprint] to amend the wireless transfer application to identify the changes in the Transaction…and provide other parties with an opportunity for comment…I will also schedule a pre-hearing conference to set a revised scope and schedule for the re-opened proceeding.

In theory, Bemesderfer’s ruling could completely reboot the CPUC’s review of the T-Mobile/Sprint/(and now) DISH deal and push a decision off until sometime next summer. In practice, it’s likely to have a more limited effect, with exchanges of exhibits, testimony and rebuttal, plus decision drafts and a final commission vote, taking a few months.

Administrative Law Judge’s Ruling Re-Opening Record to Take Additional Evidence and Directing Joint Applicants to Amend Application, 27 August 2019

Attachment 1 – certificate of service
Attachment 2 – Exhibit 1 Proposed Final Judgment and Exhibit 2 Stipulation & Order
Attachment 3 – Exhibit 3 T-Mobile USA Form 8-K

My collection of T-Mobile/Sprint/DISH transaction documents is here

T-Mobile tries to catch its California boomerang, with the usual result

by Steve Blum • , , , ,

Boomerang fingers

T-Mobile filed its reply yesterday to critics who don’t want the California Public Utilities Commission to blindly accept the wonderfulness of the deal it reached with anti-trust enforcers at the federal justice department, as it tries to complete its acquisition of Sprint. The CPUC should behold the glory of that settlement, T-Mobile’s lawyers argued, because it’s irrelevant.

Huh, you ask?

Yeah, it’s bizarre logic but it makes sense in a twisted sort of way. T-Mobile “advised” the CPUC of the federal anti-trust settlement apparently in a fit of selfless good citizenship, I suppose because no one might have noticed it otherwise. Of course, it’s simply one more bit of proof that T-Mobile and Sprint want to combine with each other and shrink the U.S. mobile broadband market from four competitive players to three oligopolistic ones because of the avalanche of social progress that will be unleashed, and not from any untoward desire to extract monopoly profits from the deal. But actually, T-Mobile’s reply brief argues, the dump truck load of public benefits that it’s backing up to California is already big enough and there’s no need to quibble about federal anti-trust proceedings because the “record before the Commission is comprehensive and complete, and the case stands submitted”.

What might be going on is that T-Mobile figured out that the federal settlement, which involves launching a new mobile competitor in the form of DISH, opens a whole new set of questions in California. Like, what happens to the Sprint and/or T-Mobile employees who will be cut loose and left with only the opportunity to apply for a new job with DISH? Will DISH make good on T-Mobile’s and Sprint’s erstwhile obligations in California? Can the new T-Mobile still offer the incredibly awesome rural service it promised (and outside experts debunked) even though it’s giving up valuable low band spectrum to DISH?

In other words, the federal settlement changed the game, and T-Mobile is backpedaling now, claiming it’s the same game and the CPUC can and should ignore it.

It’s not, and the CPUC can’t and shouldn’t.

DISH has spectrum for urban people and rural land, but maybe not for rural Californians

by Steve Blum • , , , ,

Dish aws3 spectrum per allnet insights and analytics via fiercewireless

Analysis done by Allnet Insights & Analytics for FierceWireless raises doubts about whether the settlement reached by the federal justice department with T-Mobile, Sprint and their new partner, DISH, will make a meaningful difference in rural California. The question is whether DISH has enough of the right kind of spectrum to offer the same kind of fast, high capacity broadband service it might in urban areas to California’s particular kind of rural communities.

The analysis and accompanying maps, as presented in an excellent article by Monics Alleven, “suggest DISH owns a lot of spectrum”. But it’s not evenly spread across California’s land area…

Allnet Insights President Brian Goemmer said he has typically focused on Dish’s spectrum holdings in major markets, and was surprised that Dish’s AWS–3 spectrum is fairly limited in rural areas. Based on his assessment, coverage is going to be Dish’s big challenge. There’s a big difference between covering all of the U.S. population versus having good enough coverage to take rural customers from AT&T and Verizon.

AWS–3 spectrum is a grab bag of frequencies that the FCC auctioned off beginning in 2014. It’s what’s known as mid-band spectrum, in the 1.7 GHz and 2.1 GHz ranges. Those bands are the workhorses of the mobile telecommunications world, with a good balance of total capacity, and propagation distance and penetration.

Those bands are particularly important in many parts of rural California, such as the Salinas and San Joaquin valleys, where people live in densely populated small (by Californian standards) communities. Low-band spectrum, which is typically thought of as a rural solution, is good at serving wide areas with low density populations, but won’t be as effective in what are for all practical purposes mini-urban communities in the middle of largely unpopulated rural areas.

It’s another good reason for the California Public Utilities Commission to take a fresh look at the merger, and not blindly accept the wisdom of T-Mobile and its friends in Washington, D.C.

Wrangling over T-Mobile’s federal antitrust settlement continues in California

by Steve Blum • , , , ,

Two organisations that largely make their living objecting to utility company requests at the California Public Utilities Commission, and then billing the company involved or the CPUC for their time, filed a me too response yesterday to T-Mobile’s bid to speed up review of its proposed merger with Sprint.

T-Mobile, Sprint and DISH reached an agreement a couple of weeks ago that satisfied anti-trust objections raised by the federal justice department. The deal would let T-Mobile take over Sprint, while DISH would get reseller rights on the new network, and spectrum and retail assets to eventually build a competing system. They then asked the CPUC to accept the federal settlement as received wisdom and approve it immediately.

The CPUC’s public advocates office and a major telecoms union swiftly replied, arguing that 1. there was no procedural basis for what T-Mobile asked, and 2. the new deal with DISH needs to be examined rather than rubber stamped.

TURN and Greenlining, which style themselves utility consumer advocates and vigorously partake of the CPUC’s “intervenor compensation” program, [restated those arguments in yesterday’s filing](https://tellusventure.com/downloads/cpuc/t

mobile_sprint/turn_opposition_motion_to_advise_tmobile_sprint_5aug2019.pdf). DISH’s plans, in particular, took some heat, raising the question of how deeply and actively it might need to be involved as the CPUC’s merger review moves ahead.

They also rightly accused T-Mobile of “dismiss[ing] the need for a [CPUC] review and public interest determination of its wireless transaction, instead operating under the presumption that the commission’s review of the wireless transaction has no legal effect”.

There’s no end in sight yet, for either the tussle over the DISH settlement or for the CPUC’s review overall. Last week, T-Mobile asked for and received emailed permission from the administrative law judge managing the case to file a response to everyone’s objections. They can do that any time in the next couple of weeks, but don’t expect them to wait very long.

T-Mobile tempo goes from waltz to tango at CPUC

by Steve Blum • , , , ,

Tango

T-Mobile’s request for rapid approval of its merger with Sprint and sale of assets to DISH got a staccato response from opponents at the California Public Utilities Commission, but the next step won’t necessarily follow that rhythm. The CPUC’s public advocates office and the Communications Workers of America – a major telecoms industry union – filed their objections yesterday, just three working days after T-Mobile’s motion was submitted.

The objections fall mainly into two categories: procedural and substantive. The procedural objections boil down to “this motion asks the commission to do something that is not provided for anywhere in the rules – to take ‘advisement’ of new facts, after the case has been submitted and the record closed”.

The substantive objections revolve around the sketchy details and uncertain outcome of the settlement that T-Mobile, Sprint and DISH reached with federal justice department. For the past year, the CPUC review has generated thousands of pages of legal argument and testimony about a deal that’s not exactly on the table anymore…

The proposed merger as set forth in this proceeding is solely between Sprint and T-Mobile; however, it appears that Dish Network now has a crucial role in the transaction; namely, to acquire some of Sprint’s assets in order to become a fourth major wireless carrier and allegedly alleviate antitrust concerns. Obviously, Dish’s role in this was not part of the Application because it had not occurred yet; thus, no party has had the opportunity to investigate or analyze the current proposal…

The Commission should consider whether the deal that is actually being proposed is in the public interest.

The standard process for reopening the record and allowing new developments, such as the agreement with DISH to (maybe) launch a competing nationwide mobile network, is lengthier and more contentious. It’s no surprise that T-Mobile, or anyone in their right mind, would want to avoid it. Whether they can or not is in the hands of the administrative law judge managing the case. There’s no particular timeline for him to make a decision.

Led by AT&T meltdown, big U.S. pay TV companies take a dive in second quarter

by Steve Blum • , , , ,

AT&T’s video businesses bled out in the second quarter of 2019, losing nearly a million net subscribers. Its two old school linear platforms, the DirecTv satellite service and the DSL-based Uverse service, hemorrhaged 778,000 subscribers while its DirecTv Now streaming platform took a 168,000 subscriber hit.

Actually, it’s the DirecTv Then platform – its new name, announced yesterday, is AT&T TV Now.

It’s a similar, if less gruesome, story for the other three major U.S. pay TV companies. DISH, which is positioning itself for a run at the mobile telecoms sector, lost 79,000 satellite subscribers but picked up 48,000 Sling streaming customers, for a net loss of 31,000 monthly accounts. That’s better than expected – analysts had predicted a net loss of 252,000 subs – and better than the two big cable companies.

Comcast lost 224,000 video subs, and Charter Communications had a net loss of 141,000, with residential cancellation offset a bit by a gain in business accounts.

All up, the major legacy pay TV companies lost 1.3 million subscribers between April and June of 2019. The second quarter of the year is traditionally a tough time for the subscription video business, as people take advantage of summer to move from one home to another, or to just take off and shut down utilities for a few weeks.

Even so, this year’s second quarter losses are “freaking ugly”, as one Wall Street analyst put it.

It was especially ugly for AT&T, though. It lost more than twice as many subscribers as the other three combined. It comes during a period when AT&T is trying to enter the video and motion picture business in a big way, with its acquisition of HBO, the Warner Bros. studios and the Turner networks. So far, it’s misplaying its hand. Grafting businesses driven by artistic and marketing creativity onto a monopoly model telco is a losing proposition.

It’s going to take more than an uninspired rebranding to make AT&T pretty again.