Calif. AG Mulls Options, CPUC Review After NY Declines T-Mobile/Sprint Appeal

“After a thorough analysis, New York has decided not to move forward with an appeal in this case,” AG Letitia James (D) said Sunday. “Instead, we hope to work with all the parties to ensure that consumers get the best pricing and service possible, that networks are built out throughout our state, and that good-paying jobs are created here in New York.” James said she was glad the process yielded T-Mobile job commitments in Rochester and about diversity. James didn’t say what other plaintiff state AGs might do.

California AG Xavier Becerra (D) “is reviewing the court’s ruling and our options,” a Becerra adviser emailed us Tuesday. “We are mindful that the California Public [Utilities] Commission also has this matter under consideration.”

Carriers asked the California commission to propose a decision by Tuesday so commissioners may vote at their March 26 meeting (see 2002120003). The record is closed, but California law for CPUC merger reviews says the commission “shall request an advisory opinion from the Attorney General regarding whether competition will be adversely affected and what mitigation measures could be adopted to avoid this result.”

The Utility Reform Network wants Becerra “to continue the fight using the significant evidence that they have regarding the negative impacts of this merger on consumers,” emailed TURN Managing Director-San Diego Christine Mailloux. “We expect a strongly worded opinion letter from the CA AG to be submitted in the case which can and should add to the already strong record opposing this merger.”

CPUC should complete its review quickly, said Dish Senior Vice President-Public Policy Jeffrey Blum in a Friday letter to assigned Commissioner Cliff Rechtschaffen and Administrative Law Judge Karl Bemesderfer in docket A.18-07-011. “The longer it takes for DISH to acquire the divested assets, the longer it will take for DISH to become a competitive force in the [retail mobile wireless telecom services] market,” he said.

UBS’ John Hodulik maintained a buy rating on T Mobile Tuesday and set a price target of $112 per share, above Monday’s closing price of $96.48 and its 52-week high of $96.62. The stock closed at $99.88 Tuesday, up 3.52%. Others looked for bigger implications.

New Street’s Blair Levin said the decision in the case likely won’t be viewed as a “landmark” decision with big implications for future dealmaking. “But the environment is not limited to what judges decide,” Levin told investors Monday: “It also includes what others do prior to an actual judicial decision being rendered. That is where we think the decision will have the greatest impact.” It’s unlikely to lead to huge numbers of other deals, he said. But given the importance of T-Mobile/Sprint, “the somewhat unique federal v. states circumstances, and the way the judge reached his decision, the case will become a significant reference point for ‘go-no go’ decisions on litigation and deal making,” he said.

The decision “will discourage states from taking independent action from the federal government,” but “on issues of law, there is nothing in the decision to discourage states,” Levin said. States could conclude that a different judge would have viewed the case another way, he said. The case “provides a justification for litigating, yielding to a number of states attorneys general’s commitments for their states from the companies that, but for the litigation, they would not have achieved,” he said.

Completion of the T-Mobile/Sprint/Dish Network deal will be positive for the tower sector, but “we are reminding people that it takes time to start the engines,” Wells Fargo’s Jennifer Fritzsche said in a Monday note to investors. The CEO of a tower company recently told the firm business has been “very slow,” she said: “The question is how quickly” T-Mobile “moves to open those capital purse strings once again.”