T-Mobile is looking to downgrade California's 5G and job creation merger requirements
After a nearly two-year struggle that had all the ingredients of a legal and regulatory soap opera, T-Mobile finally announced the completion of its costly, highly publicized, and incredibly consequential Sprint combination on April 1.
But that was actually before the "New T-Mobile" creation got the green light from the California Public Utilities Commission, which remained the lone such state holdout until April 16. As expected, the CPUC's belated approval came with a long list of requirements and strings attached, which T-Mo initially seemed willing to honor.
Virgin Mobile have jointly petitioned the CPUC on Monday for some pretty substantial modifications of the terms and conditions imposed a couple of months ago. There are three big things the nation's fast-growing third-largest wireless service provider wants revised, at least two of which should represent matters of great interest for Californians.While it's not entirely clear if that was ever the case, T-Mobile, Sprint, and
The current speed goals are not feasible
When the CPUC cleared the T-Mobile/Sprint merger back in April, its number one expectation was that the combined 5G network would enable access to speeds of at least 100 Mbps for 99 percent of the "Golden State's" population by the end of 2026 and 300+ Mbps for 93 percent of Californians by the end of 2024.
Judging from the average scores of Magenta's nationwide 5G service right now, which are often lower than the competition's 4G LTE download speeds, that sounded a little too good to be true, and T-Mo is indeed admitting it doesn't expect to be able to meet those deadlines.
Instead, the "Un-carrier" is seeking an extension to 2026 for the 300 Mbps 5G objective, arguing that the CPUC mistakenly set the 2024 cutoff by relying on dates used by T-Mobile at the beginning of the regulatory approval process.
In other words, the 2024 5G goal would have been feasible if the merger had closed in 2018, which was obviously not the case and actually seems to make perfectly good sense. It remains to be seen if the CPUC will agree with the validity of New T-Mobile's six-year build-out network model, especially when also taking into consideration the issue of the methodology set to be used to confirm these obligations.
While the mobile network operator wants all measurements to be based on FCC drive tests, California's main regulatory agency is pushing for a new testing methodology, which would "inevitably result in regulatory uncertainty and potentially inconsistent" results that will then raise "federal preemption concerns", causing "unnecessary" problems and controversies.
Job gains? Forget about it!
If you happened to follow T-Mobile's nearly two-year-long efforts of selling the merger to both the American authorities and the American public, you might remember then-CEO John Legere's promise made back in April 2019 of a major job creation project. The numbers sounded absolutely mind-blowing, including 5,600 new customer care jobs by 2021 alone and the employment of 7,500+ more care professionals by 2024 than the standalone companies would have.
Unfortunately, New T-Mobile started off on the decidedly wrong foot in this department, fueling the persistent speculation and repeated warnings of many industry pundits that the merger will instead lead to nationwide job losses. After permanently closing a worrying number of "redundant" Metro stores and relieving hundreds of Sprint employees of their duties in one fell swoop, the "Un-carrier" wants the CPUC's mandate for a full-time staff boost to be eliminated.
Under the conditions of the April 16 approval, the tally of combined jobs in California was supposed to eventually jump "by at least 1,000" compared to the total number of current T-Mobile and Sprint employees. But T-Mo appears to have suddenly realized this particular requirement is "well outside the Commission's jurisdiction and established policy goals."
As such, it looks like the best Californians can hope for is the current number of jobs to stay the same for the foreseeable future, which is actually what T-Mobile and Sprint voluntarily committed to right off the bat.
Magenta highlights that adding as many full-time positions as the CPUC wants would also be "particularly burdensome and unjustified in light of the current COVID-19 crisis", which again sounds fair but seems unlikely to resonate with the notoriously stringent state commission.