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National Wireless Independent Dealer Association

T-Mobile goes nuclear in California

Merger - NWIDAT-Mobile wants this deal done. Now. Today. But since the California Public Utilities Commission (CPUC) isn’t supposed to meet until April 16th (and now, who knows when), T-Mo is taking a different route.

So, per an article from Tellus Ventures (link below), T-Mobile and Sprint asked to withdraw their application for CPUC approval of the wireline elements of their merger agreement yesterday. At the same time, Sprint sent a letter “relinquishing its [California] certificate of public Convenience and necessity” That sets the stage for the two companies to close their deal without CPUC permission. It also provides a basis for challenging, if not ignoring completely, any conditions the CPUC might impose on them.

T-Mobile and Sprint have two requests pending with the CPUC. They’re asking for permission to transfer Sprint’s wireline CPCN – its authorisation to operate as a telephone company in California – to T-Mobile, and they’ve notified the CPUC that they plan to combine their mobile wireless operations. The commission bundled those two matters into a single case, something that T-Mobile objected to all along.

CPUC’s authority over a mobile carrier is murky at best. Mobile licenses are issued by the FCC, which approved the transfer. Carriers have to register their federal licenses with the CPUC, but arguably that’s just an informational filing, with no state-level regulatory review needed or allowed.

T-Mobile’s lawyers have been making that argument all along, and threatened more than once to go ahead with the merger without waiting for a decision from the CPUC. Taking the wireline issue off the table will make that far easier to do.

T-Mobile can’t simply say never mind. The CPUC can deny, or ignore, the motion to withdraw the wireline transfer application, and there’s potentially months of wrangling ahead over Sprint’s abandonment of its CPCN. But once the transaction is closed, it’ll be difficult to unwind, even if yesterday’s gambit is ultimately rejected by a court. We might know as soon as tomorrow whether the companies will try to cowboy it out and complete the merger while the CPUC is chewing it over.

You can read the article here

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