Tag Archives: t-mobile

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.

State opposition to T-Mobile Sprint deal grows, as FCC is asked to close the case

by Steve Blum • , , , ,

Tmobile san francisco 18may2019

The wrangling over T-Mobile’s takeover of Sprint continues at the state level, even while the companies try to seal the deal with the Federal Communications Commission, on the basis of a settlement reached with the federal justice department.

The California Public Utilities Commission’s review of the merger will continue into Fall. Yesterday was the deadline for publishing a proposed decision – not that one was expected – to make it on the commission’s 12 September 2019 meeting agenda. Opponents of the merger want it to go even further, and have asked that the evidence gathering phase be reopened in light of the settlement. T-Mobile is yet to file its counter argument.

Since the settlement was announced, both Oregon and Texas have signed on to the multi-state lawsuit launched by state attorneys general to block the deal. The addition of Texas AG Ken Paxton lines a prominent republican up with a herd of democrats, and takes much of the anti-Trump edge off of what ought to be an antitrust issue. In a press release, Paxton said fewer competitors in the mobile marketplace means less service and higher prices…

After careful evaluation of the proposed merger and the settlement, we do not anticipate that the proposed new entrant will replace the competitive role of Sprint anytime soon…It is the Attorney General’s responsibility to preserve free market competition, which has proven to result in lower prices and better quality for consumers. The bargain struck by the U.S. Dept. of Justice is not in the best interest of working Texans, who need affordable mobile wireless telecommunication services that are fit to match the speed and technological innovation demands of Texas’ growing economy.

On the other hand, T-Mobile is appealing to its republican friends on the FCC, in the hopes of blocking any further review there. Lobbying groups representing mostly wireless broadband providers and rural telecoms companies want the FCC to take public comment on the settlement reached with the federal justice department, and on DISH’s request for extension of deadlines for making use of spectrum it already controls. T-Mobile’s response amounts to you’re already on our side, so what’s to discuss?

Prior to the announcement of the [antitrust settlement], a majority of the Commissioners publicly stated their support for the merger based on the record before the Commission. The additional commitments resulting from the Consent Decree only create added public interest benefits for consumers and competition…However, consideration of these additional benefits is not necessary to find the transaction to be in the public interest.

You’d think that maybe someone would want to confirm that the terms of the antitrust settlement are 100% benefits, but if everyone has already made up their minds, why bother?

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.

T-Mobile’s proposed drop kick of employees to DISH might boomerang in California

by Steve Blum • , , , ,

Feral kid boomerang

T-Mobile bought out another opponent to its merger with Sprint, but could have hurt its chances of gaining regulatory approval in California.

Following its deal to get resale, retail and spectrum assets from T-Mobile, DISH filed a request yesterday with the California Public Utilities Commission to withdraw its opposition to the merger, saying its agreement with T-Mobile and the federal justice department “will facilitate and accelerate DISH’s entry into the wireless market as a fourth nationwide facilities-based mobile network operator thus solving the harms of the reduction in competition” caused by the merger.

That’s arguable, but might not matter. The California attorney general took the lead on the competition question. The CPUC, on the other hand, is looking at a broader range of issues, which may include whether the merger is “fair and reasonable to affected public utility employees, including both union and nonunion employees”.

Under the deal, DISH would get Sprint’s “prepaid” – i.e. pay for service in advance – wireless customers, who tend to have lower incomes than “post paid” – billed monthly for services used – subscribers. Those customers will continue to use the networks operated by the new, merged Sprint/T-Mobile company, as will any other customers DISH signs up. In industry jargon, DISH will be a “mobile virtual network operator” (MVNO), reselling services provided by the new T-Mobile company.

T-Mobile agreed to hand over information about employees who work on the “prepaid” side of the house, and make them “available for interviews” in case DISH wants to “make offers of employment”. But DISH isn’t required to hire them, and T-Mobile isn’t required to keep them. Combined with DISH’s decades-long obsession with keeping labor costs low and its reliance on independent retailers, that adds considerable weight to the argument made by the Communications Workers of America that the merger will “eliminate jobs”.

It’s also another reason for the CPUC to not rush to judgement on the merits of the merger, as T-Mobile urged last week. It could be months before a decision, and when it comes it might not be yes.

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.

California kicks T-Mobile-Sprint deal to September. Or maybe much later

by Steve Blum • , , , ,

Tmobile san francisco 18may2019

The California Public Utilities Commission can’t act on T-Mobile’s request for permission to acquire Sprint until the middle of September, at the earliest. Yesterday was the deadline for any proposed decisions – in any proceeding, T-Mobile or not – to be placed on the commission’s 15 August 2019 meeting agenda. The next scheduled meeting after that is on 12 September, which means a draft decision would have to be released for the legally required 30-day public review period by 13 August.

Even that date is optimistic. There are two good reasons to doubt that the CPUC will be in any hurry to move ahead on a final decision for the next few months. First, no one knows what the T-Mobile/Sprint deal looks like yet. All the testimony and legal exchanges to date are predicated on the relatively straightforward purchase agreement the two companies announced a year ago. If a new agreement that satisfies the concerns of the federal justice department emerges, the organisations that have been fighting against the original deal at the CPUC will want a chance to review it. That process can be shortened, but even if it moves at lightning speed it will still require several weeks.

Then there’s California attorney general Xavier Becerra, who is one of several state AGs suing to block the merger. He’s gone to court to kill the deal, so it’s a reasonable guess that he hasn’t yet responded positively – or at all – to the CPUC’s request for an opinion, as required by the California Public Utilities Code. T-Mobile might settle its dispute with the state AGs out of court, but if it doesn’t it’s looking at a trial that could stretch into next year, particularly if the judge hearing the case grants the request for a delay made by the states on Monday.

The CPUC might let Becerra worry about the anti-competitive aspects of the deal, and move ahead with a decision regarding other issues such as the merger’s impact on services for low income Californians and infrastructure in rural areas. But the fluid nature of the deal raises the possibility that an early CPUC decision could get overtaken by substantive changes to the terms, which should have been considered. That would be a risky course to take, with little or no gain to the CPUC even if it turned out well.

Extra meetings can happen. The CPUC held one on an emergency basis earlier this year when PG&E filed for bankruptcy, and another is scheduled – with proper notice – for later this month. There are also provisions for waiving the 30-day review period under California law. Don’t expect T-Mobile to get that kind of accomodation, though. The possibility of the lights going out in northern California rates as an emergency; missing an arbitrary corporate deadline does not.

Top mobile execs let air out of the 5G balloon, which will “never reach rural America”

by Steve Blum • , , ,

Deflating balloon

It’s one thing to promise the moon to customers and city councils, but quite another to mislead Wall Street. Creating outrageous expectations there can land you in jail. Which, presumably, is why two top executives from Verizon and T-Mobile are walking back expectations of a universal 5G wonderland.

According to a story by Sean Hollister in The Verge, it’s about the new frequency bands that mobile companies plan to use for high speed, low latency 5G service. Those bands are way up the spectrum chart, in the millimeter wave range, where data capacity is high but range and penetrating power is low. So to make it work, mobile carriers need to build a lot of small cell sites. Which is expensive and only pencils out where revenue potential is equally high…

“We all need to remind ourselves this is not a coverage spectrum,” Verizon CEO Hans Vestberg told analysts on the company’s Q1 2019 earnings call on Tuesday — just one day after T-Mobile CTO Neville Ray decried Verizon’s 5G rollout as one that would “never reach rural America.”

“Millimeter wave (mmWave) spectrum has great potential in terms of speed and capacity, but it doesn’t travel far from the cell site and doesn’t penetrate materials at all. It will never materially scale beyond small pockets of 5G hotspots in dense urban environments,” Ray wrote.

5G technology can be used on any frequency band, and over time – decades, likely – it’ll replace 4G and older equipment. And there are plans to use it on a few lower frequencies with less data capacity and greater reach in the near term. But without network densification – lots of short range small cell sites – 5G will just be a tech upgrade, and not a quantum leap into a hyper connected world.

It’s a tech upgrade that will bring significant benefits, as did upgrades from 2G to 3G, and 3G to 4G, but it will take a long time for rural and suburban California to notice the difference.