T-Mobile must be busting out the champagne flutes because the California Public Utilities Commission (CPUC) announced Wednesday it has issued a proposal to approve the merger of Sprint and T-Mobile with conditions.
The news comes the same day California Attorney General Xavier Becerra announced that his office reached a settlement with T-Mobile. California and New York led the coalition of states that sued to block the deal and argued their case before U.S. District Judge Victor Marrero, who ultimately ruled in favor of the companies.
Shortly after his decision was announced, New York Attorney General Letitia James said her office would not appeal the decision, but Becerra left the door open at the time, saying his state’s legal team was reviewing the options.
'Well positioned' against AT&T, Verizon
The CPUC said Section 854 of the Public Utilities Code provides that a merger involving a public utility may not occur without authorization from the CPUC. The CPUC’s proposal—which is out for public comment—finds that the merger between Sprint and T-Mobile would create a new company that would be “well-positioned to provide a robust 5G wireless communication service network” that can compete with AT&T and Verizon.
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The CPUC is proposing conditions that sound along the same lines as what some other states ascertained, such as providing 5G with speeds of at least 100 Mbps to 99% of the state’s rural population by the end of 2026 and providing 5G with speeds of at least 100 Mbps to 85% of the state’s rural population and speeds of at least 50 Mbps available to 94% of California’s rural population by the end of 2026.
The combined company must increase jobs in California by at least 1,000 compared to the total number of current Sprint and T-Mobile employees, and it’s supposed to have back-up power to serve customers for at least 72 hours after an emergency event or a utility public safety power shut-off.
The CPUC said it may take enforcement actions if T-Mobile fails to comply with the conditions. The proposal orders that an independent monitor be appointed to review compliance.
It also indicated coordination with the AG’s office, having received an advisory opinion from the state AG on March 5 regarding the proposed merger. “It concluded that while the anti-competitive effects of the merger outweighed its potential benefits in the state of California, those effects could be mitigated with various types of conditions, as imposed by today’s proposal,” the CPUC said.
Comments on the CPUC's proposal are due in 20 days. The first opportunity for CPUC commissioners to vote on the proposal is April 16, which indicates the closing transaction date could be May 1.