California watchdog alleges T-Mobile misled regulators to obtain Sprint merger approval

T-Mobile misled state regulators about its planned CDMA network shutdown to gain approval for its 2020 merger with Sprint, according to a ruling from the California Public Utilities Commission (CPUC). As first reported by Ars Technica, the watchdog ordered the carrier on Friday “to show cause why it should not be sanctioned by the commission” over providing “false, misleading, or omitted statements.”

One of the main ways T-Mobile won regulatory approval for its $26 billion acquisition of Sprint was by agreeing to sell Boost Mobile to a competitor. In 2020, Dish paid $1.4 billion to acquire the Sprint prepaid brand from the carrier. As part of the deal, T-Mobile agreed to provide 4G LTE and 3G CDMA service to Boost customers while Dish worked on moving them over to a 5G network it was building on its own. Initially, T-Mobile said it would support those customers until 2023, but the carrier’s current CDMA plan will see it shut down that part of its network on January 1st, 2022. That’s in 137 days as of the writing of this article.

The CPUC lists five contradicting claims from T-Mobile, one of which involves a statement the carrier made that Dish would have up to three years to migrate Boost Mobile customers. The watchdog can fine T-Mobile up to $100,000 per offense. While that’s unlikely to hurt the carrier, it could lead to additional scrutiny from the CPUC. “The discrepancy between information in T-Mobile’s testimony and information provided in its response is so serious that it warrants further investigation by this commission,” the watchdog said. T-Mobile will have a chance to answer the CPUC’s allegations during a hearing on September 20th.

T-Mobile CEO Mike Sievert responded to the ruling in a lengthy blog post the carrier published last week. “Listen, this is a manufactured crisis, orchestrated by Dish, and it is about money, not customers,” he said. “If Dish was really concerned for customers, they would simply take real action and get their customers new phones on time, before the network upgrade happens, just as T-Mobile is doing for affected Sprint customers.”

To that point, Dish has said the number of customers involved, in combination with the ongoing global chip shortage, makes it impossible to migrate them all to a 5G device before T-Mobile shuts down its CDMA network early next year. “A forced migration of this scale under this accelerated time frame is simply not possible and will leave potentially millions of Boost subscribers disenfranchised and without cell service come January 1st, 2022,” the company said in a letter to the Federal Communications Commission back in April.

We’ve reached out to both T-Mobile and Dish for additional comment.

The CPUC ruling follows a recent July 9th letter the Department of Justice sent to T-Mobile and Dish. The agency said it had “grave concerns” over the impending shutdown and the possibility that a significant number of Boost Mobile customers would be left without service on January 1st, 2022. The DoJ said it expected both companies “to take all available steps” to remedy the situation.