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In SDNY T-Mobile and Sprint Trial Judge Marrero Asks His Own Questions to Altice

By Matthew Russell Lee, Patreon

SDNY COURTHOUSE, Dec 11 – After more states lining up against the proposed T-Mobile / Sprint merger, on which a two week trial to begin December 9 before U.S. District Court for the Southern District of New York Judge Victor Marrero. Inner City Press began what will be a trial-long live-tweet, here. Day II morning here. More on Patreon here. Day III here. More D3 on Patreon here.

 On December 11, there were witnesses Jay Bluhm, the Vice President of Network Planning at Sprint, followed by Hakim Boubazine, COO pf Altice in Long Island City, Queens, then plaintiffs' antitrust expert Carl Shapiro. Here's some of how it went, more on Patreon here:

Witness Jay Bluhm, Sprint VP of Network Planning, is being asked about claims Sprint would "leap-frog" the market with first wide coverage 5G for mobile, in order to not be a "Me Too laggard."   Notable (mis) use of the term "Me Too."

Now Bluhm is being asked about his role in "Plan B" for  Sprint  in the event that the merger doesn't go through / is blocked by this case.

 Now Judge Marrero comes forward with a question: "Given what these metrics show, lack of capital and network investment lagging behind competitors - as an engineer, what does it say to you about the future of Sprint?"

 Then almost immediately Judge Marrero declares a break in the trial. His questions sure to be analyzed. Now NY Attorney General lawyer asks Judge Marrero is he can clear the courtroom for some testimony by Hakim Boubazine, COO at Altice. They are considering having the witness jot down information on a piece of paper - Mafia style. The decision is put off until end

Now Altice's Boubazine is asked about DOJ's deal with  T-mobile , "are you familiar with that?" Judge Marrero has shown what appears to be frustration at this testimony - on top of the request to clear the gallery of the courtroom. Score for the proposed mergers?

 Now Sprint lawyer Steve Sunshine is up to question Altice's Boubazine, he says for half an hour until Marrero's next planned break at 1 pm (when the gorging fest on the 15th floor, yesterday mixed with criminal case of shackled prisoners), mixed

 Sunshine: Altice is a public company filing an accurate 10K? A: to the best of my knowledged. Sunshine: I'd like to show you Altice's 10K. Defendant's Exhibit 7065, at page 12.  Objection. Judge Marrero: Overruled. He is an officer of the company.

 Sunshine reads from the 10K, including listing as competitors TrakPhone and Cricket Wireless. Q: Do you agree with that sentence sir? It's a yes or no question. A: Mr. Sunshine, I am reading the document... I agree with the sentence.

Now up: expert Carl Shapiro. After Judge Marrero urges them to skip over his 20 page c.v.  and get right into it.  He does: the merger is anti-competitive. He'll go over this for the next hour or more.

 Q: What are the horizontal merger guidelines, did you have any role in them? Shapiro: Yes, I took a lead on the DOJ side.  Judge Marrero rocking back and forth in his chair.

 Shapiro starts defining the relevant market - then turns to Judge Marrero and says, "As you know, your Honor." Seems to wonder why the plaintiffs are bombarding Judge Marrero with basic information that he already knows, it is only annoying him, it seems.

 Q: How would the merger hurt competition? A: Sprint was disruptive, and would be gone. T-Mobile was disruptive but would change.

Q: Give some examples of Sprint being a maverick. A: They work with Google-Fi.... and if Sprint is gone, who is going to do it? Q: How would New T-Mobile hurt competition?  A: They wouldn't have the same motivation to compete.

Q: Let's talk about John Legere ... Does this merger have to do with his personality? A: This is not about corporate culture, it's about economic incentives.

 Judge Marrero: Is there evidence of competition between Verizon and AT&T? Would they compete even more aggressively? Let me amend that, Part of the assumption seems to be that price is everything. I think you alluded to that these firms do not raise it immediately

A: Remember, Sprint's market share is only 15%. But when people leave T-Mobile, 40% of them go to Sprint. Judge Marrero inter-locks his fingers, leans back in chair. Earlier he was told, "It's your mind that matters."  More on Patreon here.

On the morning of December 10 Deutsche Telekom's Timotheus Höttges was confronted with deposition testimony in which he expressed doubt that DISH could be a real competitor.

  Hottges insisted he had been referring to DISH as it was in 2014. It is not clear what Judge Marrero thought; his questions to Hottges were about whether under the deal with DOJ the merger would still benefit Deutsche Telekom and T-Mobile. (Hottges' answer was yes). Here's more of how it went, here.

More on Patreon here.

On December 9 Judge Marrero began the trial by saying that opening statements are unnecessary, asking, Are they for me? For the witnesses?   Then the first witness was not here and they took a break. Inner City Press checked out "overflow" room 15B - corporate lawyers everywhere.

The plaintiffs / States play a mobile plan advertisement, very loud. Now presents press release "after Project Samurai was gone." Q: So Project Samurai put significant pressure on T-Mobile? A: Well, we retired the plan. Q: But only after extending it...

 Q: So T-Mobile responded to Project Samurai with its Metro pre-paid, right?

A: In 2015? I'm not sure. They cannot know what T-Mobile is really thinking. They assume. Q: Let me show you this Competitive Alert...

  Outside overflow courtroom 15B, full of a corporate lawyers, they put out a lunch spread not seen before in SDNY hallways. Money talks. But what about the merger?

  The docket does not say much. Other than an order allowing the lawyers to bring into court their laptops, the last letter was filed entirely under seal, here.  Inner City Press will have more on this, and on the CEO witnesses when they appear. More on Patreon here.

 Back on December a final pre-trial conference was held.

 Inner City Press was there, and will cover the trial. On December 6 the plaintiff states' lawyer Glenn D. Pomerantz dominated the conference, going through each of the four points in his letter to Judge Merrero and more.

  T-Mobile or Deutsche Telekom's lawyer David I. Gelfan of Cleary Gottlieb wanted more than 50% of the time alloted. Judge Marrero shot that down, saying that to him equitable means cut in half. Judge Marrero largely tried to avoid the disputes, urging the lawyers to settle their conflicts and try their cases.

 Where Judge Marrero drew the line was on timing and exhibits. He still aims at a two week bench trial, saying he's willing to go to six pm to accomplish that. He urged exhibits to be agreed in advance. He said one of the questions will be DISH.  There will be a Comcast witness. Inner City Press will cover the trial. The case is State of New York, et al., v. Deutsche Telekom AG, et al., 19-cv-5434 (Marrero).

***

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