AT&T, Sprint Battle in States over T-Mobile Merger

Sprint is expected to file in other states as state commissions begin their work, a spokesman said. Regarding potential filings with other states, “we foresee no additional requirements,” an AT&T spokeswoman said. Meanwhile, the Department of Justice has reportedly expanded its review of the merger, asking the two companies for additional information, Bloomberg reported Tuesday. One wireless attorney said that isn’t a surprise and such followup requests are typical in major merger reviews.

The number of short comments on the merger also continues to grow, to more than 3,000 by our deadline. A number of organizations have established websites to channel comments to the FCC. One example is Consumers Union’s http://hearusnow.org. “Why should we allow AT&T to swallow T-Mobile and control more Americans’ cell phones than any other company in the nation? Haven’t we been down this road before?” the website asks. “FCC staff has a great deal of experience in reviewing major transactions, and has the systems and resources in place to thoroughly review and analyze the application and the public filings in response to the application,” an FCC spokesman said.

The California PUC, which recently modified the state Lifeline program, would look at the merger’s potential impact on Lifeline and other consumer issues, a spokesman said. CPUC staff is considering filing comments with the FCC, he said. The CPUC chairman had proposed reviewing the merger so “we may see more from California than we think,” a state regulatory analyst said. The “filing with California Public Utilities Commission is ‘an information-only’ filing,” AT&T said.

The Louisiana Public Service Commission doesn’t get involved in wireless mergers so it won’t assert jurisdiction over the merger, said Eve Gonzalez, general counsel. The commission hasn’t seen any formal filing against the merger, she said. The Hawaii Public Utilities Commission is reviewing the filing and will be determining the commission’s authority over the merger and any potential consumer issues shortly, said Commissioner Carlito Caliboso. AT&T asked the Arizona Corporation Commission to issue an order granting a waiver or approving the merger without an evidentiary hearing.

AT&T asked the West Virginia Public Service Commission to authorize AT&T to file an informational filing instead of a merger application. The state commission has authority under West Virginia Code 24-2-12, said Michael Fletcher, deputy director with the commission. Under the law, the commission may grant its consent in advance or exempt from the requirements of any merger or consolidation upon proper showing that terms and conditions are reasonable and that neither party is given an “undue advantage” over the other, and don’t adversely affect the public in the state. There are no “set issues” predetermined, said Fletcher. There are broad issues to be investigated, he said.

AT&T claimed “the law is unsettled” on whether the West Virginia commission has authority over wireless transactions. Until 2006, transfers of control of wireless providers were completed upon the filing of a letter with the state commission for informational purposes, AT&T said. But it acknowledged that there were cases when the commission reviewed transaction applications. Yet in a recent commission order regarding Verizon’s acquisition of AllTel, the commission continued to recognize the post-closing notification process, AT&T said. Alternatively, AT&T and T-Mobile, without agreeing that the commission has jurisdiction over merger review, “and only to the extent such approval is deemed necessary,” asked the commission to grant its consent in advance or enter an order exempting the transaction from the review process.

Sprint petitioned the West Virginia commission to intervene, saying the merger would hurt consumers in the state by raising prices, restricting innovation and limiting choices of wireless providers. The carrier urged the commission to conduct a thorough investigation through “a contested case proceeding.” Sprint also cited Public Knowledge and Consumers Union’s opposition in its filing. AT&T claimed the merger would allow it to deploy LTE services far more broadly “across virtually all of West Virginia, increase broadband competition and drive economic growth. It emphasized T-Mobile’s limited presence in West Virginia. Based on what has been filed publicly, “nothing substantiates AT&T’s claim that the merger gives AT&T anything it does not have today that will facilitate its ability to deploy next generation wireless more broadly in West Virginia,” Sprint said. “Anyone who looks at our current plan to deploy 4G LTE in West Virginia versus our deployment plan after the merger can see the tremendous benefits this transaction will bring to West Virginia consumers,” an AT&T spokeswoman said.