A coalition of public interest and labor groups have joined a growing band of critics urging the Federal Communications Commission to open a public comment period on what they call fundamental changes to the proposed T-Mobile and Sprint merger.
Common Cause, Communications Workers of America (CWA), Free Press, Open Technology Institute and Public Knowledge this week added their voices to earlier calls from rural interest groups for a new comment window, saying new developments raise important public interest and competition issues.
The move comes as FCC Chairman Ajit Pai on Wednesday circulated a draft order to approve the $26.5 billion deal, calling it one of the “most exhaustive merger reviews in Commission history.”
The U.S. Department of Justice (DoJ) signed off on the merger earlier this year after reaching a series of agreements, including T-Mobile and Sprint divesting spectrum and certain prepaid assets to Dish Network. The DoJ settlement includes an MVNO agreement for Dish and is meant to set the satellite TV provider up to become a fourth national facilities-based competitor. Dish has filed related FCC requests to extend buildout deadlines tied to its current spectrum licenses.
“Given the significance of this instant merger proceeding, which will fundamentally restructure the wireless market, the Commission must protect the integrity of the merger review process by putting the DISH waiver and extension request, deployment commitments, and the associated DOJ Consent Decree out for public comment,” the interest groups wrote in the Aug. 13 ex parte filing (PDF).
The coalition argues that failure to seek public comment on deal changes would violate the Administrative Procedures Act (APA), given the “extraordinary nature” of these “inextricably interrelated developments.”
Under the APA, FCC action is considered “arbitrary and capricious” if the agency completely fails to consider an important aspect of the problem, according to the interest groups.
Rural groups Rural Wireless Association (RWA) and NTCA—the Rural Broadband Association—last week raised the APA argument in the groups’ own call for a comment period, which T-Mobile and Sprint formally opposed. T-Mobile and Sprint said the petitioners provided no credible basis “that could plausibly justify yet another delay in Commission action in this proceeding."
In its Aug. 9 opposition filing (PDF), T-Mobile said APA comment requirements only apply to rulemaking proceedings.
The public interest and labor groups slammed T-Mobile’s position, saying it “borders on the preposterous,” and that APA is fully applicable to the current proceedings.
"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 the Open Technology Institute, in a statement following Pai’s announcement of a draft order. “The courts have repeatedly ruled against this FCC for violating the Administrative Procedure Act, but today's action is a new low.”
Stager added that the deal with Dish “would dramatically upend the wireless market, raise consumer prices, and kill jobs—and the American people aren't being allowed to comment on it. They can’t even see the FCC’s draft order."
While Pai had signaled his support for the deal earlier this year prior to DoJ approval, Commissioner Jessica Rosenworcel reiterated in a Tweet Wednesday that she’s not convinced the merger will ultimately benefit consumers.
Commissioner Geoffrey Starks indicated he also wants public comment on new developments in the deal.
“What’s before us now is not the same deal the parties filed months ago. To address Department of Justice concerns, the parties made a new deal,” said Starks in a statement. “I’m surprised the FCC is ignoring past precedent and practice by failing to seek public input,” he said.
For its part, T-Mobile said last week that the record is comprehensive and complete and “the additional commitments resulting from the Consent Decree only create added public interest benefits for consumers and competition.”
T-Mobile has also committed that the combined company won’t raise prices for three years, will deliver 5G across the country with at least 90% of the population receiving 100 Mbps within six years, including 55% of rural Americans within three years of deal closed.
Even without a public comment period, T-Mobile and Sprint face a major deal challenge from a group of state attorneys general that have sued to block that deal. Oregon this week was the latest state to join the lawsuit, which now involves 16 AGs, led by those representing California, New York and Texas. That trial is slated to begin in December.