WTB Seeks Comment on T-Mobile/Sprint Declaratory Ruling & Waiver Requests for Auctions 101 & 102

Updated: Aug 17, 2018

On August 8, 2018, the Wireless Telecommunications Bureau (the “Bureau”) released a Public Notice seeking comment on the separate requests of T-Mobile US, Inc. (“T-Mobile”) and Sprint Corporation (“Sprint”) for a clarification and declaratory ruling, respectively, on the FCC’s certification requirement, or alternatively a waiver of that provision, to ensure that their Business Combination Agreement (“BCA”) will not bar their independent participation in Auctions 101 and 102 (AU Docket No. 18-85, DA 18-831). The Bureau also seeks comment on Sprint’s request for limited waiver of the rule prohibiting major modifications of short-form applications, or alternatively, a waiver of the accuracy obligation, to allow T-Mobile and Sprint to close their transaction quickly if the proposed merger is approved.

The Commission’s rules generally prohibit joint bidding and other arrangements involving auction applicants, but exclude certain agreements (i.e., agreements for transfer or assignment of licenses) that both do not relate to the licenses at auction and do not address bidding at auction or post-auction market structure.

T-Mobile requests confirmation that the BCA falls within the exception to the prohibition on joint bidding arrangements in order to participate in the upcoming Auctions 101 and 102, arguing that BCA does not relate to the licenses at issue or address bidding or market structure. Alternatively, T-Mobile seeks a waiver of the prohibition, arguing that its participation in the auctions will promote broad auction participation and that applying the prohibition would be inequitable, unduly burdensome, and against the public interest based on the unique circumstances of the transaction. T-Mobile also argues that it has no reasonable alternative to seeking clarification or a waiver, as delaying the proposed merger for the duration of Auctions 101 and 102 would present excessive financial and operational risks to both companies.

Sprint filed a petition for declaratory ruling that the BCA does not constitute a joint bidding arrangement, arguing that the BCA is neither an arrangement relating to the licenses at auction or an arrangement communicating bidding strategies or post-market structure. Sprint alternatively requests a waiver of the prohibition on joint bidding, explaining that: 1) applying the rule would block interested parties from participating; 2) the BCA will not facilitate auction-related “anticompetitive behavior” because the terms of the arrangement have been publicly available for months; and 3) the waiver is in the public interest by allowing Sprint to compete for mmW spectrum. Additionally, Sprint seeks a waiver of the rule prohibiting major amendments to short-form auction applications in the event the merger is approved, asserting that a waiver would allow it to make a major amendment reflecting change in ownership after bidding has ended but before long-form applications are due. Alternatively, it requests a waiver of the obligation to update its short-form application during that period.

Under the Auctions 101 and 102 Public Notice, the Bureau is directed to act quickly on requests for determinations on how the prohibition on joint bidding arrangements might apply in the context of specific agreements. Accordingly, comments are due August 22, 2018.

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