Pai jumps in on T-Mobile’s side, CPUC and federal justice department not cheering Sprint deal yet

21 May 2019 by Steve Blum
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Tmobile san francisco 18may2019

T-Mobile threw a hail mary pass to Federal Communications Commission chair Ajit Pai yesterday, hoping to move its proposed merger with Sprint over the regulatory approval line. Pai caught it and started running, but could be tackled short of the end zone by the justice department. And the California Public Utilities Commission’s review is still a whole ’nother ball game.

Yesterday morning began with Pai announcing that new promises from T-Mobile about divesting a down market subsidiary – Boost Mobile – and expanding rural wireless coverage led him to “believe that this transaction is in the public interest and intend to recommend to my colleagues that the FCC approve it”. One colleague, commissioner Brendan Carr, who sometimes seems to thinks he’s still a private attorney representing mobile companies, joined in, saying the deal will let the U.S. “notch another win in the global race to 5G”.

Awesome stuff.

Unfortunately for T-Mobile and its republican-appointed cheering section at the FCC, not everyone agrees. Commissioner Jessica Rosenworcel, a democrat appointee, tweeted her skepticism: “we’ve seen this kind of consolidation in airlines and with drug companies. It hasn’t worked out well for consumers…I have serious doubts”.

So does the federal justice department, at least according to a story by David McLaughlin in Bloomberg

The Justice Department is leaning against approving T-Mobile US Inc.’s proposed takeover of Sprint Corp., according to a person familiar with the review, even after the companies won the backing of the chairman of the Federal Communications Commission.

The remedies proposed by the wireless carriers earlier Monday don’t go far enough to resolve the department’s concerns that the deal risks harming competition, said the person, who asked not to be named because the investigation is confidential.

The California Public Utilities Commission is also reviewing the merger. T-Mobile wasted no time yesterday telling the administrative law judge (ALJ) managing the case about the FCC’s epiphany. The immediate effect is to add another layer of complexity and, perhaps, more time to an already complicated and lengthy case. Californian opponents of the merger get time to make an argument against accepting the FCC’s T-Mobile’s manifesto or to ask for a procedural detour to delve into it. Enough time to all but guarantee that a draft decision won’t be published in time to make it onto the agenda for commission’s last meeting in June.

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