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T-Mobile/Sprint merger faces scrutiny from lawmakers concerned with the FCC's approval process

T-Mobile/Sprint merger faces scrutiny from lawmakers concerned with the FCC's approval process
While there's still no end in sight to the T-Mobile/Sprint merger saga that started with a $26.5 billion agreement way back in April 2018, the nation's third and fourth-largest wireless service providers managed to move one big step closer to a happy conclusion a couple of months ago. 

That's when the Federal Communications Commission finally approved the mega deal set to reshape the entire industry, reducing the number of major mobile network operators from four to three and potentially spawning a fierce adversary for market leaders Verizon and AT&T. 

But even though the FCC had 18 months to carefully consider all the ramifications of its close yet fairly predictable recent vote, two top lawmakers are unhappy with the Commission's scrutiny process and "troubling lack of transparency" regarding said scrutiny and especially all the conversations carried with T-Mo representatives while still contemplating the merger's pros and cons.

The FCC may have bent some rules for T-Mobile

In a December 16 letter addressed to Federal Communications Commission Chairman Ajit Pai, Energy and Commerce Committee Chairman Frank Pallone, Jr. and Judiciary Committee Chairman Jerrold Nadler express their "serious concerns" with respect to an "apparent lack of appropriate process" that led to the FCC's approval of T-Mobile's purchase of Sprint.

The two Democratic members of Congress are pointing the finger at the Republican FCC Chairman for a couple of big reasons, alleging Pai repeatedly violated the Commission's own regulations. A series of 25 so-called "ex parte" discussions apparently took place between T-Mobile officials and FCC Commissioners in the July 26 - October 16 timeframe alone without the details of these conversations being disclosed to the public.

An ex parte presentation, according to the FCC's own explanation, is a communication, written or oral, directed to the merits or outcome of a proceeding that, if written, is not served on all the parties to a proceeding, and if oral, is made without giving all the parties to the proceeding advance notice and an opportunity for them to be present. In other words, these 25 presentations might have tipped the balance in favor of T-Mobile's arguments, but even though its 2011-updated rulebook says otherwise, the FCC has chosen to be awfully mysterious about said arguments, describing only the general nature of the lengthy ex parte communication.

Perhaps the greatest concern, however, is that an initial analysis of the merger compiled by a specially assembled task force was allegedly replaced and revised "in the eleventh hour and behind closed doors" to essentially echo T-Mobile's assertions regarding industry competition and any possible impact on prices without carefully and objectively evaluating all the data. Those are pretty damning accusations, especially considering the fact Ajit Pai's Commission didn't leave a lot of time for "public review and comment" before casting its final vote.

The lawmakers want answers

This is not one of those open letters meant purely to underline the indignation of a public figure at the behavior of a political rival, as the Energy and Commerce Committee Chairman and Judiciary Committee Chairman also have a list of very clear demands for FCC Chairman Ajit Pai. First, Pallone and Nadler would like to know if the FCC considered providing the public with an additional comment period after the Department of Justice cleared the T-Mobile/Sprint merger back in July.

Secondly and perhaps more importantly, the two senior Congressmen are interested in finding out whether the FCC is investigating or at least thinking about investigating T-Mobile's compliance with the Commission's ex parte rules. Of course, even if that's the case or will ultimately be the case and even if the "Un-carrier" is found guilty of opaque practices meant to withhold its communications and lobbying from the public, there's no guarantee the FCC ever plans to punish Magenta in any meaningful way.

Finally, the FCC is asked to produce "all drafts" of the merger order, including the draft originally circulated to the Commissioners, and each subsequent draft to check for last-minute revisions that may have influenced the vote, downplaying the potential "competitive harms" of the union between T-Mobile and Sprint. Ajit Pai has until January 6, 2020 to answer these questions and requests, although it's not entirely clear what Pallone and Nadler can do if the FCC Chairman simply refuses to offer this information.

Meanwhile, T-Mobile probably has more important things on its plate after obtaining the FCC's stamp of approval, as it continues to defend the merger in a multi-state lawsuit that could be the final hurdle standing in the way of completing a vital deal for both the nation's third and fourth-largest cellular companies.

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