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.
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.