NY, Calif. AGs Unmoved as 2 States Bail on States' T-Mobile/Sprint Suit

Paxton's pact with T-Mobile, he said Monday, is “resolving the state’s antitrust claims” (see 1911250016). It prevents the combined carrier from increasing prices for wireless services in Texas for five years. The New T-Mobile would build out a 5G network throughout the state, including rural areas, over six years. “Incredible news,” tweeted T-Mobile CEO John Legere.

Nevada ditched other suing states later the same day. AG Aaron Ford (D) said he reached a settlement to resolve his concerns about the deal’s impact to local jobs, innovation and the economy. T-Mobile pledged 100 Mbps 5G for 64 percent of Nevada’s population in three years, and 94 percent -- including 83 percent of rural residents -- in six years. T-Mobile promised cheap plans, Nevada jobs and $30 million supporting minority- and women-owned small businesses, and for broadband for Nevada tribes. Sprint stock closed up 3.5 percent to $5.94.

Pacts don't “resolve the fundamental anti-competitive concerns at the core of this case -- that the megamerger of T-Mobile and Sprint will reduce competition in the mobile marketplace,” responded New York AG Letitia James (D), leading the states’ suit. “There is no doubt that this merger remains bad for consumers, bad for workers, and bad for innovation, which is why we remain committed to litigating this matter and look forward to the commencement of trial.”

“Our coalition of states remains strong as we ready for trial on December 9,"emailed a spokesperson for California’s Xavier Becerra (D). The AG's “bottom line” is “protecting consumer choice and competition.”

Coming Trial

Those watching the litigation told us the changes mightn't much change the case.

The defections seem unlikely to reduce other states' determination, and carriers are running out of time to avoid trial, said Northeastern University's John Kwoka. But state coalitions are always fragile and can be more so when different states have different stakes and interests, he said.

It slightly improves odds of settlement before trial, but odds remain “very low,” emailed New Street’s Blair Levin. A Republican AG on board was better political optics for the states, “but we are moving out of the political realm and into the legal realm,” the analyst said. “The antitrust law and facts are unaffected.”

That Texas joined the suit this summer was surprising "given this issue is mostly being fought by Democratic states,” Wells Fargo analysts wrote Monday. “Although the number of states fighting the deal has declined, the case will still go to trial if even one state remains in the lawsuit.” The issue “has become quite political,” and settlement seems increasingly unlikely with each day that New York and California remain involved, they said.

"It's an unseemly process" that requires T-Mobile to negotiate side deals with AGs, tweeted the Free State Foundation.

Deal opponents slammed the pacts.

It “should give little comfort to Texas workers and consumers,” emailed Communications Workers of America Telecommunications Policy Director Debbie Goldman. “The Texas AG press release simply promises ‘substantially similar employment’ to currently employed Sprint and T-Mobile workers, leaving the door open to forced relocation to jobs hundreds of miles away, reduced compensation and commission plans, and other changes in working conditions.” It “does not cover employees selling T-Mobile and Sprint at authorized dealers, who comprise three-quarters of the retail workforce,” she said.

"How will the Nevada AG monitor and enforce the jobs commitments?" Goldman asked. "He can't -- without an independent union representing the New T-Mobile employees. T-Mobile continues to refuse to respect its employees' right to organize free from employer intimidation."

With no specifics provided, the Texas announcement's “nothing more than smoke and mirrors,” said Rural Wireless Association General Counsel Carri Bennet. T-Mobile “regurgitates” commitments it made to DOJ and describes promises in a way that makes them easy to sidestep later, she said.

California

In California, T-Mobile and Sprint urged the Public Utilities Commission to rule this week that no further hearings are needed. They are tentatively scheduled Dec. 5-6. The CPUC is the last state agency OK needed (see 1910250016).

Issues raised by the CPUC Public Advocates Office in support of more California commission hearings are outside the review’s scope, not responsive to joint applicants or Dish Network’s supplementary testimony, and/or reflect PAO’s conclusions “rather than actual disputed material facts,” wrote Davis Wright’s Suzanne Toller, representing T-Mobile and Sprint. Assigned Commissioner Cliff Rechtschaffen and Administrative Law Judge Karl Bemesderfer should rule quickly that no hearings are needed, she said in a Monday email distributed to the service list for docket A.18-07-011. Dish would get some divestitures.

Shifting customers and assets to Dish "is highly likely to increase the harms of the previously Proposed Merger on customer choice and service quality,” and increase privacy risks, PAO said Friday.

The PAO listed six areas of dispute: (1) if the Dish pact will substantially alleviate possible competitive harms, (2) whether optionally transferring 800 MHz spectrum to Dish will reduce service quality, (3) whether a T-Mobile plan to retire lower-cost legacy plans protects consumers, (4) whether customers of Boost Mobile LifeLine pilot will be transferred to Dish and if that pilot will continue, (5) impact to data privacy and (6) if Dish can be a viable fourth-largest carrier in a “reasonable time period.”

The Dish arrangement doesn’t necessitate more hearings, said the California Emerging Technology Fund, which has a memorandum of understanding with the carriers. Recent changes to the deal “are quite minimal and have no impact on the package of public benefits that CETF obtained in the MOU.”

In other comments, CWA and the Greenlining Institute continued to condemn the deal.