T-Mobile tells CPUC it “lacks jurisdiction” and should address its “deficiencies”, as Sprint deal closes without its permission

1 April 2020 by Steve Blum
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History of the World, Part 1 - Piss Boy

T-Mobile is doing what it planned to do all along: complete its acquisition of Sprint today, regardless of whether it has regulatory approval to do so from the California Public Utilities Commission. In a letter sent to the CPUC commissioner and the administrative law judge in charge of the merger review, T-Mobile’s chief operating officer Michael Sievert said he’s doing what he thinks he needs to do, and not only is the commission powerless to act but it should see the light and rubber stamp the deal…

Finally, as we have explained to the Commission previously, an April 1 close is critical to the parties, as accounting and financial reporting needs, and the imperative for accuracy of such reporting, significantly limit the available closing dates for the merger, and delaying beyond April 1 would result in substantial — and ever-increasing — harm and risks to [T-Mobile and Sprint].

Notwithstanding our abiding view that the Commission lacks jurisdiction over this transaction, we have fully cooperated in the CPUC’s 20-month review process. T-Mobile stands ready to honor the nearly 50 voluntary California-specific commitments it has made in connection with the deal. However, notwithstanding our appreciation of the proposed decision’s recognition of the many benefits of the merger, it contains a number of obligations that in addition to exceeding the CPUC’s jurisdiction are not supported by the record, are practically impossible, are unfair and discriminatory to T-Mobile vs our competitors – including the entrenched incumbents, and/or are anti-competitive. Accordingly, [T-Mobile and Sprint] urge you to revise the proposed decision to address those deficiencies and to proceed with a vote on the modified proposed decision to close the proceedings at the Commission’s April 16 meeting as scheduled.

Sievert opened the letter by blaming his defiance on the covid–19 emergency, but went on to justify it by airing the same arguments T-Mobile and its local lawyers have been making for the past 20 months, long before the pandemic began. T-Mobile has to get about the “important work” of integrating networks so it can deliver “massive benefits” to Californians, he said.

The question now is how, or if, the CPUC or California attorney general Xavier Becerra will respond, and what happens to the truckload of “voluntary California-specific commitments” that T-Mobile dangled in arguments and testimony or the sterner conditions in the draft decision that’s so upsetting to Sievert. Saying you “stand ready” to keep a promise isn’t the same thing as promising to keep it.

Those conditions include requiring T-Mobile to increase its workforce in California by 1,000 jobs, keep its promise to compete for in-home customers, and offer better broadband service in rural communities.

We might get a peek at what’s to come later today, when the first round of public comments on the proposed decision are due and challengers can have their say. A posse from the CPUC’s public advocates office, the Communications Workers of America and TURN made the rounds of commissioners’ staff last month, as did T-Mobile and its helpmate, the California Emerging Technology Fund. Those opponents urged complete rejection of the merger. It’s a fair bet they’ll repeat that advice in their comments, as well as offer some polite suggestions for disemboweling this morning’s transaction.

Links to arguments and exhibits 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.