T-Mobile pauses merger of Sprint operations in California, but only until next week

9 April 2020 by Steve Blum
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Tmobile billboard las vegas 6jan2020

In a whirlwind of conference calls with California Public Utilities Commission staff and one key commissioner, T-Mobile said it would abide by an order that stopped its merger with Sprint on an operational level in California, at least until next week’s CPUC meeting. When the two companies closed their deal last week without permission from the CPUC staff, commissioner Clifford Rechtschaffen, who is in charge of the regulatory review, quickly directed them to “not begin merger of their California operations until after the CPUC issues a final decision”.

That led to several ex parte conference calls over the following two days. The first was with Rechtschaffen and CPUC staff; three others were with staff for commissioners Martha Guzman Aceves, Liane Randolph and Genevieve Shiroma. In the follow up disclosure filing required by CPUC rules, T-Mobile says it would comply, sorta…

During each meeting, Joint Applicants’ representatives described the reasoning for the close of the merger on April 1, reiterating and expounding upon the explanation provided in the March 31, 2020 letter from Michael Sievert to Administrative Law Judge Bemesderfer and Commissioner Rechtschaffen. They also acknowledged Commissioner Rechtschaffen’s April 1 Ruling, and stated that the Joint Applicants would refrain from merging their California operations until a Commission decision is made at the April 16 business meeting.

T-Mobile’s weasel worded statement doesn’t promise to abide by the commission’s decision, or to wait beyond next week if the case isn’t closed then. As could happen. The merger is on the commission’s agenda for next Thursday, but it’s not unusual for items to be bumped to future meetings or for complex cases to remain open. Sprint’s request to abandon its license to operate a wireline telephone business in California met with protests from merger opponents who want a formal review, and T-Mobile’s subsequent attempt to withdraw its application for permission to take over that business amounts to throwing a wrench into the gears of a already complicated proceeding. Even if commissioners approve a decision of some sort next week, it doesn’t necessarily mean that’s the end of the case. Or the end of Rechtschaffen’s order to delay combining the companies’ Californian operations.

T-Mobile and Sprint aren’t alone in lobbying commissioners to see things their way. Opponents of the deal are likewise having conference calls with staff, as it the California Emerging Technology Fund, which wants the CPUC to not be so darn harsh on the new T-Mobile.

Links to arguments, exhibits and other paperwork 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.