When the U.S. Department of Justice filed its antitrust lawsuit to stop AT&T's proposed takeover of T-Mobile, the California Public Utilities Commission (CPUC) essentially put its investigation on hold.
In a short statement on the CPUC's website, which was posted a few days after the DOJ filed its lawsuit in August, the CPUC said it was, "working to assess the effect of the DOJ development on our proceeding, and further information on the schedule for this proceeding will be forthcoming."
Well quietly this week, that promised "further information" was announced by the CPUC.
On Nov. 16, the CPUC's Administrative Law Judge investigating the proposed transaction announced a new schedule for comments on AT&T's economic and engineering models which were filed at the CPUC in August.
Comments are now due on Dec. 12. Reply comments are due Dec. 20. These comments were originally due in September.
What prompted this step?
Well, we know that oral arguments in the U.S. v. AT&T trial begin in February. My guess is that the CPUC wants to wrap up its investigation and make a decision before then, or at least before Judge Huvelle announces her ruling in the court case, which could happen as soon as March.
I'm also speculating that the CPUC got a better idea of what's going in the FCC's investigation when CPUC officials met with Federal Communications Commission officials earlier this fall in Washington.
If I were a CPUC Commissioner, in addition to acting before the judge rules, I'd also want to make a decision before the FCC takes any action in its docket. Observers in Washington are increasingly speculating that the FCC will issue a "Hearing Designation Order", which would send the whole matter to the FCC's Administrative Law Judge. That's a required step for the FCC to take if it is going to block the merger.
It wouldn't surprise me at all if the CPUC issues some sort of decision before the FCC takes such a step. But first, the CPUC's Administrative Law Judge needs to wrap up her investigation.
Announcing new due dates for these comments is a step in that direction.
But all of this is speculation on my part. It's never a wise idea to presume what's in the mind of a regulator.
That said, it IS a good idea to look at what the law says. Under California law, the CPUC has broad discretion to determine whether or not AT&T's proposed transaction is, "in the public interest" of the people of California.
They could approve the transaction, impose conditions or block it entirely. If the CPUC blocks the transaction, AT&T would be unable to close the transaction in California, even if the company beats the Justice Department in court and convinces the FCC to approve its merger application.
That's why observers following AT&T's bid to takeover T-Mobile should not overlook what's happening in San Francisco.
