T-Mobile is telling the California Public Utilities Commission (CPUC) that some conditions attached to its approval of the T-Mobile/Sprint merger are not valid, including those related to 5G buildout tests and adding jobs.
T-Mobile filed a petition with the CPUC saying the requirement to add 1,000 new employees in California is inconsistent with the CPUC’s regulatory authority and it’s burdensome, especially in light of the economic disruption created by the COVID-19 pandemic.
“The commission simply does not have the authority to require a wireless carrier to hire a particular number of employees in a given time period,” the filing (PDF) states. “The legislature has never granted it such authority and, prior to the issuance of the decision the commission has not attempted to impose such a mandate on any other communications provider in any context.”
Even if the commission had the authority, “that condition should still be modified because of the major consequences the ongoing COVID-19 pandemic has had on the economy and the long-term effects it may have on companies like T-Mobile over the next several years,” the company told the CPUC. “The current economic crisis makes the imposition of a mandate to create additional jobs infeasible and unwarranted.”
In a statement, T-Mobile said that it committed to the CPUC that in three years the total number of T-Mobile employees in California will be at least as many as the combined total of Sprint and T-Mobile employees in the state at the time of the merger closing.
“Our jobs commitment has not changed. We continue to stand by that commitment, as well as our separate commitments to offer jobs to all T-Mobile and Sprint retail employees in good standing at closing with T-Mobile and to open a new Customer Experience Center in the state,” the company said in the statement provided to Fierce.
T-Mobile also seeks to amend the target date for providing average speeds of 300 Mbps to 93% of California to 2026, i.e., six years after the close, not 2024, as “mistakenly noted in the decision.”
A third modification it’s seeking has to do with testing the 5G network. The buildout of the T-Mobile 5G network is subject to two independent testing programs under the auspices of the FCC and the California Emerging Technology Fund (CETF), and, it argues, it should not be subject to a third program under CalSPEED.
“Our goal is to ensure the CPUC’s final decision aligns with what was presented in our proceeding and clearly articulates the benefits this merger will deliver to Californians,” T-Mobile said in a statement. “We appreciate the willingness of the Commission’s staff and the Commissioners to work with us to resolve our outstanding concerns and clarifications.”
CWA: T-Mobile ‘backpedaling’
The Communications Workers of America (CWA) union said T-Mobile has already begun backpedaling from its commitments.
"Last week T-Mobile Chief Executive Mike Sievert was telling the public that the job cuts the company was making were just part of the transition process and that T-Mobile would create 5,000 new positions in retail and engineering in the next year," said CWA President Chris Shelton in a statement Tuesday. "Today, we find out that behind the scenes the company is telling California regulators that it can’t meet the requirement to create 1,000 jobs in the next three years. It turns out that the new T-Mobile is a lot like the old T-Mobile – all talk, no action."
While T-Mobile and Sprint executives repeatedly said before the transaction closed that the merger would result in more jobs, not fewer, the CWA in a 2018 filing with the FCC estimated that the merger was likely to eliminate 30,000 jobs, with authorized retailers and prepaid stores being hit the hardest.
“Sadly, these predictions on job loss have begun to come true,” CWA stated. “In April, reports surfaced that T-Mobile planned to close 1,500-2,000 Metro by T-Mobile stores and last week the company revealed that it has already cut 241 positions at the former Sprint headquarters in Kansas.”
T-Mobile closed its acquisition of Sprint on April 1 before the CPUC voted on the matter, telling the commission that it had to close the merger or risk losing out on the deal due to the upheaval in the financial markets related to COVID-19. T-Mobile also had argued that it didn’t need CPUC permission to take over Sprint’s mobile business.