T-Mobile/Sprint Made Late Push Before 3-2 FCC Vote Approving Deal
Top regulatory officials from T-Mobile and Sprint spoke with FCC Commissioner Geoffrey Starks about the “public interest benefits” of their deal, the same day he voted to reject it (see 1910160058), said a filing posted Thursday in docket 18-197. The filing describes a flurry of activity in recent days. DLA Piper lawyer Nancy Victory said she spoke with aides to Commissioners Mike O’Rielly and Brendan Carr Friday and FCC Chief of Staff Matthew Berry Tuesday “to inquire about the status of the merger order.” The order was approved 3-2 Wednesday, with dissents by Starks and Commissioner Jessica Rosenworcel.
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Citigroup’s Michael Rollins now pegs odds of consummation at 57 percent, compared with 90 percent in July. “There could be a risk that T-Mobile asks for a better deal from Sprint (i.e. a change in deal terms) if any further merger concessions to secure approvals and remove roadblocks (such as the lawsuit from multiple State [attorneys general]) would significantly dilute the value of the previously-established synergies,” Rollins told investors Thursday: “T-Mobile remains highly motivated to pursue the transaction, despite the delays, given the opportunity to quickly increase scale of both subscribers and spectrum in a single transition that can further improve the competitiveness of the combined firm and accelerate the combined 5G deployment strategy.”
Starks said T-Mobile should stick to a memorandum on diversity and inclusion reached with civil rights groups, even if its buy of Sprint falters. “Our major companies should have a workforce that looks like America, from entry level positions to the board of directors,” Starks said Thursday. “I would expect T-Mobile to honor the commitments made here regardless of the outcome of pending litigation regarding this transaction.”
The memo's “a groundbreaking agreement entered into with six of the nation’s most influential civil rights organizations,” emailed former Commissioner Mignon Clyburn, an adviser on the deal. T-Mobile didn't comment.
More trouble could be coming. Georgetown Law Institute for Technology & Policy Distinguished Fellow Gigi Sohn told us “it is almost a certainty that there will be” an Administrative Procedure Act challenge to the FCC order.