Oregon joins the anti-merger brigade to dampen T-Mobile/Sprint party

Oregon Attorney General Ellen Rosenblum has is the latest recruit for the coalition of lawyers aiming to block the merger between T-Mobile US and Sprint.

Almost immediately after FCC Chairman Ajit Pai offered his blessing for the union, Rosenblum hit back with the announcement. T-Mobile US and Sprint might be collecting the approvals from government agencies, but unless they can figure out how to appease the Attorney Generals, another headache looms large on the horizon.

“It’s important that Oregon join other states in opposing the Sprint-T-Mobile merger,” said Rosenblum. “If left unchallenged, the current plan will result in reduced access to affordable wireless service in Oregon — and higher prices. Neither is acceptable.

“Oregon’s addition to our lawsuit keeps our momentum going and ensures that there isn’t a single region of this country that doesn’t oppose this anticompetitive megamerger,” said New York Attorney General Letitia James. “We welcome Attorney General Rosenblum to our 16-member coalition that now includes states representing almost half of the U.S. population. We remain committed to blocking the merger of T-Mobile and Sprint because it would be bad for consumers, bad for workers, and bad for innovation.”

James is of course the ring-leader when it comes to this legal saga, though we suspect in crafting the position of consumer champion, the Attorney General of New York has higher political ambitions. Irrelevant to the end-game, James has proven to be very effective in collecting support for this lawsuit.

Rosenblum will now become the 16th member of an increasingly dangerous opponent for T-Mobile US and Sprint. One lawyer as an opponent is a daunting prospect, but 16 Attorney Generals and 16 antitrust department working against the progress of the merger is the stuff corporate nightmares are made of.

The full list of States now opposing the merger include: New York, California, Texas, Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, Oregon, Virginia, Wisconsin, and the District of Columbia.

Having been filed with the District Court for New York on June 11, we suspect this might be somewhat of a prolonged battle. First, judges in New York will have to decide on the appropriateness of the merger, though you can almost guarantee whatever outcome will be appealed by the losing party. We suspect this is a see-sawing legal conflict which will carry on for months.

T-Mobile US and Sprint are nearing the finish line, but it is still well out of reach for the moment.

Could net neutrality challenges lead to the end of the FCC?

Governor Kate Brown has signed House Bill 4155 making Oregon the latest US state to push back against FCC moves to repeal net neutrality laws, but are these challenges undermining premise of the FCC?

The whole situation is starting to get a bit messy for FCC Chairman Ajit Pai who has effectively turned almost half of the states against federal efforts to relegate net neutrality to the footnote. While the foundations of the challenges from the states are still a little bit shaky, the Communications Act has a clause which prevents states from passing laws which contradict federal ones, few would have predicted Pai’s actions would have caused such a tsunami of discontent.

In most examples of unpopular legislation or regulation there is compromise or the fad passes allowing politicians to find another banner to wave, but this is an issue which has persisted. In signing the bill into law, Brown is yet another who is challenging the status quo and also foundations of the communications industry. Should these laws be allowed to stand, in direct violation of clauses in the Communications Act, what will be the wider repercussions for federal regulations in the US communications industry?

That said, perhaps this is an unintended, but perfectly acceptable, outcome for Pai and his colleagues. It is no secret the Republicans in US Government lean more towards market freedoms, therefore the redundancy of a national regulatory body would maybe assist in creating a more acceptable market in their eyes.

The idea of a nationalised 5G network was rumoured, though the FCC did its best to distance itself. The agency has also been trying to reduce the influence of the federal Lifeline programme, an initiative which assists poorer families in accessing the digital world. At his first open meeting, Pai promised to “remove unnecessary or counterproductive regulations from the books”. One of his own advisors also wrote an opinion piece asking whether the US actually needs the FCC, suggesting the powers and responsibilities should be distributed among other agencies.

In each of these examples, Pai, or his colleagues, have made efforts or expressed desires to reduce the influence the FCC has on the national communications industry. Each move undermines the position of the FCC and moves the country towards a more hands-off regulatory environment, one which is controlled and influenced by business.

Brown has challenged the legitimacy of the new regulations (or lack thereof) and undermined the position of the FCC in the communications sector. And she is not alone. California State Senator Scott Weiner is introducing Senate Bill 822 which will reintroduce net neutrality while also banning zero-rating, House Bill 2282 has been signed into law in Washington by Governor Jay Inslee and there are numerous other challenges from Senators, Attorney Generals and consumer groups throughout the country.

All of these movement weaken the position of the Communications Act, and in turn the legitimacy of federal agencies and their ability to manage the industry on a national level. In trying to protect net neutrality rules, the Governors, Senators or Attorney Generals are making it more difficult to manage a consistent telecommunications industry.

We do not agree with the wild-west which Pai seems to be promoting, or with the strict regulatory regime former FCC Chairman Tom Wheeler created. The right answer will sit in the middle, but the rules need to be challenged at federal level, in Congress. Right now the states are creating a bureaucratic mess which questions the role of the FCC. Most Democrats in the US are pro-regulation and market controls, therefore we struggle to believe they would be happy to see the influence of such an agency dwindle. Even if they don’t agree with the current establishment, there is a longer-game to think about here.

Can national legislation or agencies survive when national policies are being undermined at a state level? Is this the first Jenga piece being removed at the base of the Communications Act?