CPUC Fines T-Mobile for Lacking 'Candor' on CDMA Migration
T-Mobile must pay a nearly $3.59 million penalty for misleading the California Public Utilities Commission about its CDMA transition, commissioners decided unanimously Thursday. The CPUC mostly rejected T-Mobile’s May appeal of two administrative law judges’ initial April decision, though it reduced the fine by about 33% from $5.33 million (see 2205260008 and 2204260061). The CPUC denied as moot the carrier’s June motion for alternative dispute resolution (see 2206090017).
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"It's not a huge fine given the size and resources of T-Mobile, but it is large enough to be meaningful,” CPUC Commissioner Cliff Rechtschaffen said at a remote meeting livestreamed from Chico, California. “And it's also large enough to show how seriously we take the applications of parties who appear before us to comply with our ethical rules or rules of practice.” The decision “is a very strong reminder that we need and expect candor and accuracy in our decision-making process,” he added.
California commissioners affirmed the ALJs’ ruling that the carrier violated commission rule 1.1 by misleading the CPUC with false statements that it would have a three-year customer migration period for Sprint customers to T-Mobile and Boost Mobile customers to Dish Network. "The Commission relied on T-Mobile USA’s commitment to a three-year customer migration period when it" cleared T-Mobile/Sprint in April 2020, said the draft modified presiding officers’ decision in docket A.18-07-011. For 239 days, not the 355 as the ALJs initially found, T-Mobile continued to misrepresent that it wouldn’t end the transition early, it said. The CPUC penalized the carrier $15,000 per day.
When the CPUC approved T-Mobile/Sprint, commissioners “were very concerned that customers would get stranded without access to service, particularly low-income customers and rural customers,” said Rechtschaffen: The commission relied on T-Mobile representations that nobody’s service would be disrupted during the three-year migration. The carrier didn’t comment by our deadline.
“An intent to mislead is not required to find a Rule 1.1 violation,” said the adopted decision in response to T-Mobile’s appeal. The commission previously said omitting correct information and failing to correct wrong information are violations, it said. “The need for candor and accuracy is especially important for witnesses giving Commission testimony under oath, as the Commission relies on this testimony to form its decisions, and misrepresentations may lead to harm to the public.” Rule 1.1 doesn’t require all false statements to be “clearly false” and T-Mobile had a duty to correct the record, it said.
The CPUC disagrees that T-Mobile never promised a three-year migration or that the ALJs’ decision didn’t “consider the broader context of how the migration was to occur,” the draft said. "Regardless of whatever context that T-Mobile USA wishes the Commission to consider, the promise of a three-year customer migration is inescapable.” Also, the CPUC "rejects T-Mobile’s attempts to divert attention away from its own failure to live up to its migration time frame by focusing on how quickly or slowly DISH is migrating the Boost customers to the new DISH network,” it said. “T-Mobile USA’s tactics amount to nothing more than a red herring by which the Commission refuses to become distracted.”
The CPUC rejected T-Mobile’s free-speech concerns with the agency concluding that T-Mobile violated Rule 1.1 every day it disagreed with the commission’s view. "Contrary to what T-Mobile USA may be suggesting, it is not being punished for exercising its right to speak in a particular manner,” the draft decision said. “The continuing offense is grounded not in what T-Mobile USA said after” the CPUC cleared the Sprint buy, “or how it has chosen to defend itself … but for its continuing failure to comply with the requirement to provide for a three-year migration period.”
The decision “correctly and carefully demonstrates that T-Mobile violated CPUC ethics rules,” said Regina Costa, The Utility Reform Network telecom policy director. “It sends an important message to all parties that providing honest and accurate information matters. The $3.5 million dollar penalty is appropriate based on the severity of the harm to the regulatory process and the continuing nature of the offense.”