Commissioners Say California PUC Could Take Action on T-Mobile Deal
SAN FRANCISCO -- California regulators could act substantively on the T-Mobile sale, members of the Public Utilities Commission told us at a workshop where representatives of would-be buyer AT&T and lead challenger Sprint faced off directly over the deal for the first time in a government forum. State law requires the commission to decide whether action can be taken to reduce any harms to the public interest, communities served or employees from a deal such as this, and it allows the body to approve or disapprove the transaction, said Catherine Sandoval, the lead commissioner on a PUC inquiry into the deal on Friday.
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"We could come up with some California-specific conditions,” Commissioner Mike Florio said. “I think legally there are some things we could do. Whether it would make sense is another thing.” The commission decided not to formally oppose FCC approval, but it could still file comments to the federal agency, he said. Charlotte Terkeurst, Commissioner Mark Ferron’s chief of staff, said the extent of the PUC’s authority to act hasn’t been decided. The three commissioners on the five-member body were appointed this year by Gov. Jerry Brown, a Democrat.
AT&T contends that no action is justified and has reserved the right to challenge any that results from the proceeding. It hasn’t told the PUC that it lacks jurisdiction to act. No other state has held hearings on the purchase or announced them, an AT&T spokesman said.
AT&T and Sprint executives debated technical matters starting with how the purchase would affect backhaul competition in the state. AT&T, like Verizon, remains one of the major backhaul providers to Sprint and throughout the industry, said Chris Frentrup of Sprint. After the sale, T-Mobile could be expected to shift its services back to AT&T from the fiber and microwave Ethernet competitors that it has been moving to, so AT&T would realize one of the synergies it seeks from the deal, he said. That would weaken competitors, Frentrup said.
AT&T and T-Mobile executives emphasized that T-Mobile isn’t a backhaul provider, it’s too small a purchaser to move the market, and the business is booming to the benefit of upstart competitors of the ILECSs. “The transaction won’t have any impact on the service,” said Parley Casto, AT&T assistant vice president for pricing, responsible for wholesale offerings: “Competition is intense.” Sandoval expressed concern about competition in the market and asked about the effectiveness of a hypothetical condition against service contracts restricting a customer’s ability to do business with a competitor.
Sessions late Friday were to deal with spectrum access, roaming and competition. A workshop scheduled for a week later in Santa Clara, Calif., is to take up innovation issues, including handsets, distributed antenna systems, broadband and data transfer. The last in the series, June 22 in Los Angeles, is to cover customer issues including price, service quality, customer service, coverage and disclosure.
The first workshop followed a public participation hearing Thursday evening. About 80 people spoke, and about 80 percent supported the sale, an AT&T spokesman said. About one-third of those disclosed at the commission’s request financial support from AT&T, he said. But one-third to half were “average Joe” AT&T customers dissatisfied with their service and hopeful of improvement, he said.