CPUC Eyes Q2 for T-Mobile/Sprint Vote; Virginia Clears Merger
The California Public Utilities Commission aims to decide by Q2 on T-Mobile’s $26 billion buy of Sprint, Commissioner Clifford Rechtschaffen said at a Monday workshop. The CPUC plans at least three public workshops around the state before then, he said. The New York Public Service Commission is also closely scrutinizing the deal. Other states have given OKs more quickly (see 1812030029).
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Virginia OK'd T-Mobile buying Sprint. Thursday's Virginia State Corporation Commission order was subject to FCC OK. The carriers also have approval from Alaska, Colorado, Maryland and the District of Columbia.
Monday’s three-hour CPUC event on T-Mobile/Sprint included panels on the merger’s effects on competition and on low-income people and the California LifeLine program. The agency considered the workshop “informal,” meaning what was said won’t be part of the formal evidentiary record, said Rechtschaffen.
“It could be really good, it could be really bad,” said Commissioner Martha Aceves Guzman of the merger. Her top issues are impact for low-income communities, and what happens to infrastructure that carriers may perceive as redundant, she said. Network redundancies can be valuable for safety reasons and rural parts of the state, she said.
Look carefully at impact for the poor and ensure carriers maintain low-cost plans and appropriate data caps, said California Emerging Technology Fund special counsel Rachelle Chong, a former CPUC and FCC member. CETF is concerned about low-income populations that rely on wireless connections to access the internet, she said. Communications Workers of America representatives said the union opposes the deal due to worries about lost jobs. Some other members of the public supported the combination.
Regulators should view the wireless market as national, not regional, agreed economics professors. Prices are set nationwide and national competition drives the companies, said University of California-Berkeley professor Michael Katz, retained by T-Mobile to perform an economic study of the deal. Prepaid and postpaid are increasingly similar and compete, he said. Stanford University's Roger Noll said it makes sense to think of the deal’s effects in terms of customer categories, for example, by income level. “Will prices for prepaid customers go up?” he asked.
California "has almost no leverage" over the deal because carving out a regional California division of the carriers would do no one good but could consider conditions for rural areas or low-income groups, Noll said. “The regulators are in a hard place because they have to make a guess about the future of the technology without a lot of information about what it is.” Going from four to three carriers usually increases prices, while the effect on innovation is uncertain, he said. Katz said no competitive problems have been identified to justify conditions. The transaction looks likely to result in performance gains, he said. While fewer carriers creates upward pricing pressure, increased innovation could bring down costs and prices, and better mobile broadband will benefit low-income households, he said.