FCC Approves TMobile/Sprint Merger 

The FCC announced it had approved, with conditions, the transfer of control applications filed by TMobile and Sprint.  The FCC found that the transaction will help close the digital divide and advance US leadership in 5G, the next generation of wireless connectivity. 

The approval was conditioned on the parties fulfilling a number of commitments, including:  

• Within three years to deploy 5G service to cover 97% of the American people, and within six years to reach 99% of all Americans.  This includes deploying 5G service to cover 85% of rural Americans within three years and 90% of rural Americans within six years.  
• Within six years, 90% of Americans would have access to mobile service with speeds of at least 100 Mbps and 99% of Americans would have access to speeds of at least 50 Mbps.  This includes two-thirds of rural Americans having access to mobile service with speeds of at least 100 Mbps, and 90% of rural Americans having access to speeds of at least 50 Mbps. 

Compliance with the commitments will be verified by rigorous drive-testing, overseen by an independent third party and subject to FCC oversight.  In addition, the parties will be required to make payments that could reach over two billion dollars if they do not meet their commitments within six years and they will be required to make additional payments until they have fulfilled their commitments. 

In connection with the merger, the FCC also proposed—subject to conditions—modifications to construction deadlines related to DISH licenses. The proposed DISH construction deadline modifications would facilitate the implementation of certain measures in the Department of Justice’s consent decree in connection with the transaction that was announced in July, where DISH pledged to become a new entrant into the wireless industry, offering cutting-edge 5G service to over two-thirds of Americans within four years.  

The FCC concluded that the transaction, as conditioned, would not harm competition.  Specifically, it found that the transaction would enhance competition in rural America and among quality-conscious consumers along with strengthening competition in the home broadband and enterprise markets.  The FCC found that the parties’ divestiture of Boost Mobile, Sprint’s leading prepaid brand, would address the potential for reduced competition for price-conscious consumers in urban areas. 

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The Regulatory Mix Today: FCC Approves TMobile/Sprint Merger, FCC November Open Meeting, FTC/AT&T Settlement on Unlimited Data 

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FCC November Open Meeting 

FCC Chairman Ajit Pai announced the tentative agenda for the FCC’s Open Meeting now scheduled for Friday, November 22, 2019.   It includes the following items:  

• Protecting National Security Through FCC Programs – A Report and Order, Further Notice of Proposed Rulemaking, and Order that would ensure that Universal Service Fund support is not used to purchase equipment or services from companies posing a national security threat to the integrity of communications networks or the communications supply chain, propose additional actions to address national security threats to USF-funded networks, and collect information to help assess the extent to which equipment from covered companies already exists in such networks.  
• Wireless E911 Location Accuracy Requirements –A Fifth Report and Order and Further Notice of Proposed Rulemaking that would adopt a vertical, or z-axis, location accuracy metric in connection with wireless E911 calls and propose additional measures to improve E911 location accuracy.  
• Modernizing Rules for Removing Bad Actors from FCC Programs – A Notice of Proposed Rulemaking that would seek comment on updating its suspension and debarment rules to make them consistent with Office of Management and Budget guidelines, in order to better prevent bad actors from participating in Universal Service Fund programs, Telecommunications Relay Services programs, and the National Deaf-Blind Equipment Distribution Program.  
• Modernizing Unbundling and Resale Rules – A Notice of Proposed Rulemaking that would seek comment on updating its unbundling and resale rules to reflect the marketplace realities of intermodal voice and broadband competition and to encourage both incumbent and competitive local exchange carriers to invest in next-generation networks. 
• Expanding the TRS Fund Contribution Base to Support IP Captioned Telephone Service – A Report and Order that would expand the TRS fund contribution base for covering the costs of providing Internet Protocol Captioned Telephone Service (IP CTS) to include intrastate telecommunications revenue as a way of strengthening the funding base for this form of TRS without increasing the size of the Fund itself.  

The FCC will also consider two radio station related items. 

FTC/AT&T Settlement on Unlimited Data 

The Federal Trade Commission announced  that AT&T Mobility, LLC, agreed to pay $60 million to settle litigation over allegations that it misled millions of its smartphone customers by charging them for “unlimited” data plans while reducing their data speeds.   The settlement stems from a complaint filed by the FTC in 2014 alleging that AT&T failed to adequately disclose to its unlimited data plan customers that, if they reach a certain amount of data use in a given billing cycle, AT&T would reduce—or “throttle”—their data speeds to the point that many common mobile phone applications, such as web browsing and video streaming, became difficult or nearly impossible to use. AT&T’s alleged practices affected more than 3.5 million customers as of October 2014, according to the FTC complaint. 

As part of the settlement, AT&T is prohibited from making any representation about the speed or amount of its mobile data, including that it is “unlimited,” without disclosing any material restrictions on the speed or amount of data.  The disclosures need to be prominent, not buried in fine print or hidden behind hyperlinks.  For example, if an AT&T website advertises a data plan as unlimited, but AT&T may slow speeds after consumers reach a certain data cap, AT&T must prominently and clearly disclose those restrictions.  

The $60 million settlement will be deposited into a fund that the company will use to provide partial refunds to both current and former customers who had originally signed up for unlimited plans prior to 2011 but were throttled by AT&T. Affected consumers will not be required to submit a claim for the refunds.  Current AT&T customers will automatically receive a credit to their bills while former customers will receive checks for the refund amount they are owed. 

The stipulated settlement requires approval by the U.S. District Court for the Northern District of California, San Francisco Division. 

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The Regulatory Mix, Inteserra’s blog of telecom related regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of an Inteserra Briefing.