A final flurry of rebuttals defending and attacking T-Mobile’s de facto takeover of Sprint landed at the California Public Utilities Commission yesterday. The bulk of the comments amount to what I said before. But there are some interesting bits amongst all that.
The Communications Workers of America (CWA) – the primary telecoms union in California – unearthed a U.S. congressional report from 1993, when the lines were drawn between state and federal jurisdiction over mobile carriers. As CWA relates it, that staff report specifically included “transfers of control” in the list of matters that fall under a state’s authority to regulate “the other conditions of commercial mobile service”, beyond the market entry and pricing issues that are reserved for the Federal Communications Commission.
There is support in past CPUC decisions and California public utilities law for the notion that the commission has the authority to approve or deny mergers between mobile companies, but the final battle over that position will be fought in a federal court where federal law rules.
The California Emerging Technology Fund submitted a letter from a T-Mobile lawyer who said the company “fully intends to honor” the $35 million payoff and other generally vague conditions it agreed to in exchange for CETF’s support, “provided of course that the CPUC Final Decision or other CPUC action – such as a prolonged duration of [the order from commissioner Clifford Rechtschaffen halting the merger in California] do not substantially impact our ability to meet” those commitments.
Translation: if the CPUC jams us up, our intentions will change.
T-Mobile’s future good behavior is unlikely, according to the CPUC’s public advocates office (PAO). In its filing, the PAO concludes…
[T-Mobile’s and Sprint’s] statements and actions are further proof and a red flag that compliance with any merger decision or conditions will be taken lightly and ignored or challenged by the companies if the merger is approved or totally ignored if the merger is rejected; ultimately harming California consumers.
The draft decision that’s on next week’s CPUC agenda would approve the merger but impose a long of conditions. The game has changed, though, since it was published nearly a month ago. Draft decisions can change too, and in this case probably will to one extent or another. We should know for sure by the middle of next week.
Comments on the proposed decision of administrative law judge Karl Bemesderfer, 1 April 2020:
Joint Applicants (T-Mobile and Sprint)
CPUC Public Advocates Office
Communications Workers of America
TURN and Greenlining
California Emerging Technology Fund
CETF attachment A
CETF attachment B
CETF attachment C
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.