Pai Circulates Order to OK T-Mobile/Sprint; FCC Democrats Want Public Comment

“The approach by the FCC Chairman is not at all surprising given his unprecedented outspokenness ahead of the DOJ decision,” emailed Carri Bennet, Rural Wireless Association general counsel: “If adopted without further public comment, which appears to be the case, the FCC order will be appealed because it is arbitrary and capricious, not based on a full and complete record and is clearly partisan.” The draft wasn’t posted since it wasn’t circulated for a vote at a meeting.

The order likely includes language targeted to the state case, said New Street’s Blair Levin. T-Mobile/Sprint lawyers, who met with Pai several times in recent months, were likely “successful in inserting into the document findings and analysis that support the litigation strategy of the companies,” Levin told us: “I am equally certain that the court, while respecting the FCC, will not simply defer to the FCCand will make its own findings based on a lot of other evidence that both sides will present that is unlikely to be in the FCC order.”

Starks said his agency should have taken comment. “What’s before us now is not the same deal the parties filed months ago,” he said in a statement: To address DOJ concerns, “the parties made a new deal. I’m surprised the FCC is ignoring past precedent and practice by failing to seek public input.” The transaction “will alter the future of wireless service in this country and will impact everyone with a cellphone,” he said, noting the item is 273 pages. “Given its size and scope, and bipartisan litigation pending by State AGs, we shouldn’t rush our ruling without public comment,” he said.

“The FCC’s draft order approving the largest wireless merger in history just landed in my inbox,” Rosenworcel said in a statement: “I am not convinced that removing a competitor will lead to better outcomes for consumers. But what I am convinced of is that before the FCC votes on this new deal negotiated by Washington, the public should have the opportunity to weigh in and comment. Too much here has been done behind closed doors.” Starks and Rosenworcel also tweeted their concerns.

“After one of the most exhaustive merger reviews in Commission history, the evidence conclusively demonstrates that this transaction will bring fast 5G wireless service to many more Americans and help close the digital divide in rural areas,” Pai said Wednesday. He, along with Commissioners Brendan Carr and Mike O’Rielly, endorsed the deal in May (see 1905200051), before DOJ won additional concessions (see 1907260071).

Exhaustive Review

The FCC did an exhaustive review, Pai said: Staff has reviewed “thousands of pages of pleadings, millions of pages of business documents, and numerous engineering and economic models submitted by the applicants and other commenters.” Wednesday was Day 254 in the regulator’s review. The order reviews the deal as restructured in the agreement with DOJ, Dish Network’s planned buy of Boost and “certain extensions, commitments, and modifications to DISH’s spectrum holdings to effectuate its deployment of a nationwide 5G network,” Pai said. The FCC finds both the deal itself and the later agreement with Dish are in the public interest, he said.

FCC officials said once the order gets three votes, other commissioners face a deadline to vote under rules. Pai could potentially force a vote by putting the item on the agenda for the Sept. 26 meeting.

Pai would “risk a lawsuit under the Administrative Procedure Act by not putting the revised merger agreement out for public comment,” said Gigi Sohn of the Georgetown Law Institute for Technology Law and Policy. Pai also “didn’t have the guts to put this on the agenda for the Sept. 26 meeting, which under his practice would have resulted in a draft made to the public,” she told us: “So much for transparency.”

Circulating the order “answers the only question that was left,” said Craig Moffett of MoffettNathanson: “Would the FCC open a comment and pleading cycle? Now we know. And, to be fair, we could have guessed the answer to that, too.”

“It's quite likely we will get a 3-2 vote,” said Recon Analytics Roger Entner. “The T-Mobile/Sprint merger looks like a big mess,” said John Strand of Strand Consult, who also predicts a party-line commissioner vote.

“I commend the FCC on passing this important milestone toward approval of the merger and divestiture, and congratulate them on completing their thorough review and analysis,” said DOJ Antitrust Division Chief Makan Delrahim.

This is “another milestone toward bringing #NewTMobile and #5GForAll to life for US consumers!’ tweeted T-Mobile CEO John Legere: “We appreciate the FCC’s assessment & can’t wait to start delivering on our commitments.”

Critics of the deal slammed the latest. "The FCC's blind rubber-stamping of this merger is an embarrassment to the agency and a slap in the face to the American people,” said Joshua Stager, senior counsel at New America’s Open Technology Institute: “The courts have repeatedly ruled against this FCC for violating the Administrative Procedure Act, but today's action is a new low.”

The transaction itself isn’t subject to the APA, but the Dish license transfers and extensions that are part of the larger deal are, industry officials say (see 1908070059).