The prospect of litigation loomed over T-Mobile US and Sprint’s freshly minted merger barely a day into its existence, as a regulatory body in California demanded the pair maintain separate operations in the state until it signs off on the deal.
Sprint and T-Mobile originally asked the California Public Utility Commission (CPUC) to approve the deal in July 2018, submitting two separate applications covering their respective fixed and mobile businesses, which were subsequently combined into one.
Though an administrative judge recently recommended the CPUC approve the deal with conditions, the Commission issued an order on 1 April warning T-Mobile and Sprint against merging their businesses there before it decides the matter at a meeting on 16 April.
Despite its mobile application still being outstanding, on the day the merger closed T-Mobile told Mobile World Live it believed “there is no longer any need for CPUC approval”.
Steve Blum of consulting company Tellus Venture Associates noted in a blog the operators recently withdrew their fixed network application, claiming Sprint’s business in the state was “no longer providing service as a regulated public utility”.
Though mobile operators are considered “telephone corporations” and thus subject to regulation under Californian law, Blum wrote “CPUC’s authority over a mobile carrier is murky at best”.
In a letter to the Commission on 31 March (which was posted by Blum), T-Mobile CEO Mike Sievert (pictured) explained the operator believed national regulator the Federal Communications Commission had “the exclusive authority to approve wireless transactions”.
Even if CPUC does approve the merger, T-Mobile’s position could lead to a fight over the Californian authority’s ability to enforce conditions on the deal.
In the letter, Sievert called the obligations suggested by the administrative judge “practically impossible” and “unfair and discriminatory to T-Mobile versus our competitors”.
When it announced the closure of the merger, T-Mobile noted there was a “risk of litigation or regulatory actions” by proceeding without CPUC approval.
The spat did not halt T-Mobile beginning integration efforts: president of technology Neville Ray tweeted it deployed 5G on mid-band spectrum in Philadelphia the same day the deal closed, while Sievert told CNBC it will begin deploying 5G on what was Sprint’s 2.5GHz spectrum “almost immediately”.
Beyond “some issues” around site planning permission from local authorities, the new CEO doesn’t expect the ongoing Covid-19 (coronavirus) pandemic to slow progress.Subscribe to our daily newsletter Back