Key House Democrats question whether T-Mobile-Sprint merger went through 'appropriate process'

Key House Democrats question whether T-Mobile-Sprint merger went through 'appropriate process'
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The Democratic chairmen of two key House committees are questioning whether the government flouted "appropriate" procedures when it recently approved the $26 billion merger between T-Mobile and Sprint, green-lighting one of the largest telecom deals in recent history. 

House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) and Judiciary Committee Chairman Jerold Nadler (D-N.Y.) on Monday accused the Federal Communications Commission (FCC) of engaging in shady and potentially rule-breaking behavior ahead of its decision to approve the merger along party lines earlier this year. 

"We have serious concerns regarding the troubling lack of transparency and an apparent lack of appropriate process leading up to the Federal Communications Commission’s approval of T-Mobile U.S., Inc.’s purchase of Sprint Corporation," Pallone and Nadler said in a letter to FCC Chairman Ajit Pai, a Republican. 

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Several critics, including Democratic FCC Commissioner Jessica Rosenworcel and a coalition of advocacy groups, have claimed the FCC should have opened up the deal to public comment before voting for it 3-2 in October, a few months after the Department of Justice (DOJ) approved of the merger under an array of new conditions. And the Democrats, citing Rosenworcel, are accusing the agency of replacing initial evidence with analysis that "downplay[ed] the competitive harms of the merger" at the last minute. 

"To the extent that changes were made to the draft decision based on data supplied by the parties after the draft was first circulated to the Commissioners, we are concerned that there was insufficient notice and opportunity for public review and comment," Pallone and Nadler wrote.

Industry watchers have said the FCC's process around approving the T-Mobile-Sprint merger was abnormal, with the Republicans offering their blessing even before any public proposal had been circulated.

Pallone and Nadler wrote that the FCC should have opened up their proposal to review after DOJ had substantially changed the terms of the deal. But the Republican-controlled agency did not seek any additional comment.

They're further accusing the FCC of failing to disclose details about conversations during that period of time between T-Mobile representatives and FCC commissioners. 

T-Mobile representatives met with FCC commissioners 25 times between July and October, but the agency has not offered a detailed account of what was discussed in those "ex-parte" meetings, according to the letter.

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The Democrats are asking the FCC to produce documents about a potential public comment period and questioning whether the agency is investigating T-Mobile's compliance with its "ex-parte" rules.

They are also asking for drafts of all the merger orders that the FCC considered in order to check whether the Republican commissioners updated an initial draft to include data that was more favorable to the T-Mobile-Sprint merger.

An FCC spokeswoman confirmed the agency has received the letter and is currently reviewing it. Pallone and Nadler are asking for a response by Jan. 6. 

Beyond the procedural questions the Democrats are raising, the T-Mobile-Sprint merger is still facing a significant obstacle as a group of 14 state attorneys general forge ahead with a lawsuit to block the deal. The multistate lawsuit claims that the combined telecom giant would ramp up prices for consumers and result in significant job losses. 

The case is currently being argued in the U.S. District Court for the Southern District of New York.

Updated at 9:15 a.m.