T-Mobile, Sprint Merger: Democrats Accuse FCC Of 'Lack Of Appropriate Process' In Approving Deal

Two Democratic Party-led House committees have questioned the regulatory approval process to the Sprint, T-Mobile merger at the Federal Communications Commission.

In a letter to FCC chief Ajit Pai, House Energy and Commerce Committee Chairman Frank Pallone Jr. and Judiciary Committee Chairman Jerold Nadler questioned the fairness of procedures and sought to know whether flouting of “appropriate” procedures happened during the approval to the $26 billion merger deal.

The letter on Monday also accused the regulator of engaging in “shady and rule-breaking behavior” ahead of the decision making to approve the merger.

The letter to Chairman Pai, a Republican, the lawmakers said: “We have serious concerns regarding the troubling lack of transparency and an apparent lack of appropriate process."

The FCC has been under fire by many critics that the agency did not take public comments on the deal before it voted for the approval in October with a 3-2 majority after the Department of Justice (DOJ) gave its nod with certain conditions.

The DOJ brought in Dish Network as a fourth player by divesting some of the assets of the merging parties to become a 5G Mobile Network Operator to ensure fair competition.

Reiterates charges of Democratic Commissioner

Democratic FCC Commissioner Jessica Rosenworcel had strongly opposed the deal.

The Democrats cited Rosenworcel’s allegation that the FCC substituted the initial evidence with analysis and downplayed the competitive “harms of the merger” at the last minute.

The letter to FCC said “the changes made to the draft” based on data supplied by the parties after the draft’s circulation to the Commissioners implied “insufficient notice and opportunity for public review and comment.”

According to a report in The Hill, industry watchers have the feeling that the Republicans in the FCC blessed the deal long before any public proposal was circulated.

Pallone and Nadler also accused the FCC of “failing to disclose details” about communications between T-Mobile representatives and FCC commissioners. They have sought an answer from FCC by Jan. 6.

Now the merger’s significant obstacle is from a group of 17 state attorneys general who filed a lawsuit to block the deal. Hearings on the lawsuit are on. The lawsuit claims the merged telecom giant would raise prices and job losses will follow.

T-Mobile and Sprint have been offering cost-effective alternatives to Verizon and AT&T. Among them, T-Mobile has consumer-friendly plans including unlimited data and it also scrapped two-year service contracts. Now states have concerns that less competition would take away all those sops despite T-Mobile saying even after the merger it will be business as usual and no changes will happen, Fox News reported.

Analyst lowers deal’s probability

Meanwhile, a section of analysts lowered the probability of the merger deal from 85 percent to 55 percent considering the stiff challenge from states.

Analyst Ric Prentiss of Raymond James noted contrary to expectations 14 democratic state AGs, including D.C., are still in the fray to block the deal.

Since a large number of AGs are still fighting the merger and lack of a settlement #3, “we are lowering our probability of deal approval from 85 percent to 55 percent,” the note quoted by Fierce Wireless said.

The FCC has said it has received the letter and studying it.