California PUC Seeks Many Remedy Proposals, Asks New Questions, as T-Mobile Sale Inquiry Extended
California’s inquiry on the T-Mobile sale to AT&T is looking into an open-ended range of actions to reduce possible harms. A ruling late Thursday by Administrative Law Judge Jessica Hecht of the Public Utilities Commission asked participants to discuss several avenues for protecting competition, promoting innovation and supporting service quality. The filing disclaimed any assumption that the commission has authority to act on all the points mentioned, at least beyond making recommendations to the FCC.
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Pages of new questions were posed and deadlines were put off in line with extensions at the FCC. The questions about spectrum, backhaul, competition and roaming followed up on filings and on comments gathered at technical workshops and public participation hearings, a total of seven sessions held around the state last month (CD July 19 p11). The ruling also ordered participants to provide the PUC all information filed with the FCC (http://xrl.us/bk8o3m).
The target date for mailing a proposed decision on the deal is put off to Oct. 11 from Sept. 2 and the first meeting that the PUC could vote on it to Nov. 10 from Oct. 6. Under the new schedule, the PUC staff may pass the record in the inquiry on to the FCC any time. The previous timetable said if that happened, it would be this month. Regulators in Hawaii are the only ones besides California’s that haven’t signed off favorably on the purchase after looking into it.
"The sooner federal regulators approve the deal the sooner we can unleash billions in badly needed investment, creating many thousands of well-paying jobs that are vitally needed given our weakened economy,” an AT&T spokesman said. “We look forward to working with the CPUC to complete this process” in a timely way, he said. A spokesman for Sprint Nextel, the largest industry opponent of the deal, said: “The California Public Utilities Commission continues to conduct a thorough investigation of AT&T’s proposed takeover of T-Mobile and of course we will fully comply with this data request. We're confident that when this investigation is complete ... the commission will conclude that this proposed transaction is not in the public interest."
Participants were asked what specific requirements if any are needed to “a. Promote competitiveness in the backhaul market for wireless communications services in California;
b. Promote CMRS competition in serving different types of California customers including (but not necessarily limited to) value-conscious customers, customers who want more or improved data and broadband access, and other market segments in California; c. Maintain incentives for CMRS innovation in California; d. Maintain or encourage choice and innovation in the handset market in California; e. Maintain competitive access to roaming services in California; f. Maintain incentives for price competition and competitive terms available to California subscribers including early termination fees; g. Ensure that merger-specific benefits in California suggested by [AT&T and T-Mobile], including any benefits to California communities, California’s economies, and the respondents’ employees, are realized in the post-merger period; h. Improve wireless service quality in California; i. Institute data reporting requirements to assist with monitoring any changes to service quality, terms, or competition in the post-merger period; and j. Address other relevant subjects."
Hecht sought detailed breakdowns by bands, holders and locations of the spectrum available and in commercial use in California and expected to come online within six months. Specifics about the services offered and markets targeted, such as heavy data users and price-sensitive consumers, were requested. Hecht framed the questions in terms of whether AT&T’s acquisition of T-Mobile would leave enough spectrum for other carriers to compete.
Long-term contracts and quantity discounts for backhaul, and their effects on competition received considerable attention. Hecht picked up on critical comments by the state CLEC group: “In this context, we ask the parties to comment on CalTel’s discussion of what it calls ‘demand lock-up’ contracts, and provide any additional information or response relevant to the assertions made in those comments. Please provide (under seal if necessary) any contracts that you believe exemplify or undercut this description.” AT&T and T-Mobile were asked to supply specific contracts that CalTel had mentioned. The combining companies and other carriers also were given a cluster of queries about their limitations on roaming.