California CLECs Urge Service Quality Proceeding, Special Access Review on AT&T/T-Mobile

The indications are that the deal is part of an AT&T plan to move away from the wireline market, and the network it built on the backs of California business and residential consumers while “enjoying a guaranteed rate of return, for residential, rural and small business customers,” CALTEL said. The effects of that transition are already being felt by CLECs that reply on that network, the group said. It wants a separate investigation into AT&T’s retail service quality, wholesale performance and infrastructure viability and the impact of network degradation on competition in California. The group hasn’t received sufficient information to conclude its position on the transaction, DeYoung said. The commission is to have workshops July 8, 15 and 22, and the agency’s administrative law judge is asking AT&T to provide and pay for support services including court reporters and videography for all workshops, hearings and other events that are part of the investigation.

The CPUC will hear speculation and conjecture from opponents of the merger, but the facts speak for themselves, an AT&T spokeswoman said. Combining AT&T and T-Mobile is “the fastest, surest way to meet the soaring demand for mobile broadband services, while also expanding next-generation LTE wireless broadband to 98 percent of Californians, promoting jobs and investment, and fostering innovation in California’s high tech economy,” she said. The public hearing process will give the CPUC an opportunity to hear from consumers, unions, high-tech businesses and other diverse California communities about “the significant benefits the merger will bring,” she said. Californians want broadband and want it now and the deal will use private resources to meet that need, she said. The transaction will accelerate high-speed broadband buildout to more Californians and create jobs, said CWA District 9 Vice President James Weitkamp. District 9 represents 58,000 workers in California, including more than 23,000 at AT&T.

CALTEL also urged CPUC to explore if there’s a link between “demand lock up” agreements for special access and T-Mobile’s agreement to be acquired and the potential effect of the acquisition on special access and competing services. The group urged the CPUC to file with the FCC, and hopefully the U.S. regulator can address the issue in its special access proceeding, DeYoung said. The group asked the commission to request copies of AT&T’s FCC tariff a, Section 33 pricing flexibility contracts, among other information. It also urged the agency to examine the implication on wholesale wireless service to CLECs and, by extension, the small business market for competitive wireline services.

California CLEC Pac-West, which filed a motion to become a party in CPUC’s merger investigation, plans to propose conditions on the deal to eliminate the risk that T-Mobile’s current practices will become those of the combined carrier. It said it’s negotiated an agreement with AT&T covering the termination of intra-major trading area traffic, but T-Mobile continues to refuse to negotiate such an accord with Pac-West in good faith, even on the same terms as already agreed to by its proposed merger partner, or to pay any compensation to Pac-West for terminating T-Mobile’s customers’ traffic to Pac-West’s customers.

The Greenlining Institute urged the deal be blocked if various harms it would likely cause aren’t thoroughly mitigated. The California-based public policy, research and advocacy nonprofit, in a CPUC filing, cited potentially reduced competition, elimination of spectrum in the market for low-cost mobile service that could lead to network congestion, degraded service quality and higher prices. The group also noted the threat of closed retail stores and lost jobs.