T-Mobile, Sprint Get Dozens of Questions From FCC on Proposed Deal
The FCC Wireless Bureau posed 49 paragraphs of questions to T-Mobile on its proposed buy of Sprint. The FCC also asked Sprint for information spanning 48 paragraphs. Bureau Chief Donald Stockdale said in cover letters the agency needs more information to properly review the takeover. This appears typical of what's asked of companies in the middle of a similar big transaction, industry lawyers said. Both companies filed a public interest statement in June (see 1806190062). Many say the deal could face a tough time before federal regulators. The letters were posted Wednesday in docket 18-197.
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The questions probe both companies’ past decisions and claims made in support of the deal, including on cost savings. “Applicants state that, on a standalone basis, ‘T-Mobile would be capacity constrained,’ and that ‘T-Mobile’s ability to expand capacity to maximize the value of its spectrum assets and roll out robust 5G cannot come close to matching that of New T-Mobile,’” the letter said. It asked about the “engineering model and underlying assumptions”: “Provide a detailed explanation why New T-Mobile would have the incentive to invest significantly more in network infrastructure than the standalone firms, and provide all documents related to New T-Mobile’s network investment incentives.”
The bureau asked T-Mobile for “all documents since January 1, 2012 discussing its decision to participate or not in previous spectrum auctions” such as the Incentive Auction, or upcoming spectrum auctions, including the 3.5 GHz Band, the C-Band, and any millimeter wave spectrum auctions.” The bureau wants to know about the costs of building and operating cellsites and what it's doing on backhaul to support its towers and small cells. It queried T-Mobile about its plans for rural expansion through 2024.
Sprint faces a similar questions. Several ask about claims by its executives that the carrier could be in financial trouble without the deal (see 1806270068). “Provide all plans, analyses, and reports related to the impact of Sprint’s debt, EBITDA, and free cash flow on its ability to invest in its network and gain new customers or retain existing customers,” staff said. “Provide all documents, and any underlying spreadsheets, that relate to or discuss difficulties in providing any Relevant Product or Relevant Service.” The companies didn't comment.