California Public Utilities Commission set to vote on investigating AT&T deal with T-Mobile

With a majority of its members now appointees of Gov Jerry Brown (D-CA), the California Public Utilities Commission is poised to end its customary hands-off approach to regulating wireless carriers by ordering an investigation into AT&T's proposed $39-billion takeover of T-Mobile USA.

A June 9 vote on whether to launch a full-fledged investigation is the first major test of the newly reconstituted panel's willingness to take a more active role on behalf of consumers in the industries it regulates. Findings could lead the commission to recommend additional conditions — shorter contracts, lower termination fees, fines for dropped calls, for example — that might not be imposed by the Federal Communications Commission and the U.S. Justice Department, both of which must approve the deal. Lawyers said it's unclear whether the PUC has authority to block the combination in California, the nation's largest telecom market. A departure from past practice wasn't something the industry had anticipated because some believe that the PUC's jurisdiction over telecom was "a bit muddy," said Samuel Kang, general counsel of the Greenlining Institute, which represents working poor and minority communities. Kang said the commission's new attitude could be traced partly to Brown's appointment of Catherine Sandoval, a Santa Clara University law professor who specializes in telecommunications issues. The agency's previous telecom expert, he said, was not only "pro-industry but also anti-consumer." Commissioner Sandoval said at a May 26 public meeting that an examination of the deal should look at issues of competitiveness, technology and product availability. The five-member PUC voted unanimously then to ask staff to prepare the recommendation for Thursday's vote.