| In SDNY T-Mobile and Sprint Trial
Hottges Denies Dissing DISH and Cites 5G of
China
By Matthew
Russell Lee, Patreon
SDNY COURTHOUSE,
Dec 10 – 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.
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:
Q:
The first time
you heard the
term 'Rule of
Three' was
when Deutsche
Telekom was
considering
merging
T-Mobile and
Sprint,
correct?"
A
(Deutsche
Telekom's
Hottges) ...
there are
other
competitors...
Google...
DISH... Q:
Please look at
your
deposition
Q:
And one of
those who
referred to
this as a four
to three
merger was
Mister John
Legere,
correct? A:
You'd have to
ask him. Q:
And you recall
Mr. Legere
saying that
the regulatory
environment
would never be
better than
now to get
approval of a
4-to-3 merger?
Q:
When you said
over 100
million
customers, you
meant AT&T
and Verizon,
correct? A:
Yes. Q: And
you meant that
with 80
million
customers, you
couldn't
compete? A:
Correct
Q:
The DOJ deal
is designed to
make DISH a
meaningful 4th
competitor,
right? A: Yes.
Q: But within
Deutsche
Telekom you
had
discussions
about DISH's
real ability
to compete,
right? Fair to
say there was
no consensus
in DT? A:
There were
different
positions.
Now
the Deutsche
Telekom
witness
insists that
his dissing of
DISH was
referring to
DISH as
it was in
2014, not now.
But here's
directed back
to his
deposition: Q:
Does that
refresh your
recollection,
Line 24, that
you were
referring to
DISH today and
not in 2014?
Q:
Since you have
never seen
DISH compete
in the retail
mobile
wireless
business, you
have no basis
to say they
can compete,
correct? A:
With all
respect, in my
20 years, I
have seen many
companies come
into this
market and
compete. So we
always thought
DISH could
Q:
When you say
"He had to"
this, or you
could merge
with "him,"
you mean
Mister Ergen,
right? A: Yes,
I am sorry. Q:
Because Mr.
Ergen has made
commitments to
the FCC he
will abide by
them? A: He
has to. Q: But
he has failed
before. A: You
have to ask
him. Q:
C band
spectrum is
coming for up
auction,
correct? A:
That's what we
need. Q: And
T-Mobile could
win that
auction
without
eliminating a
competitor,
correct? A:
Yes. But
AT&T and
Verizon, they
show up with
deep pockets.
They always
get what they
want.
Q:
At the October
board meeting
you started
thinking about
a Plan B,
correct? A:
Correct. This
is not our
first
strategic
review. Q: I
now offer into
evidence
Exhibit 370,
375, 1007,
1034, and
8112.
[Presumably
these won't be
sealed like so
many in this
case.]
Objection!
This is a
Morgan Stanley
document. The
witness who
commissioned
it will be a
witness
later...
"We want Mr.
Höttges to be
able to go
back to
Germany so I
will expedite
things."
Judge Marrero
calls a break.
Now
under friendly
questioning,
Deutsche
Telekom's
Höttges says
"We want to
build secure
infrastructure...
In 6 years,
97% of people
will be
covered by 5G
service." Q:
Glenn
Pomerantz was
talking about
all the other
ways you could
do it. A: We
need over 20%
share
Hottges:
"Who is
leading on 5G
services? It
is Korea, it
is
China."
Wag:
from the cheap
seats, or the
overflow
courtroom on
the 15th floor
with the free
lunch for some
outside, comes
this call: why
not a Huawei
witness in
this trial?
Q:
Will you look
everyone in
this courtroom
in the face
and say you
will have the
number one
network?
Hottges: Yes.
These is no
question we
will [would]
be better that
AT&T and
Verizon, or
"Dumb and
Dumber."
Hottges:
We have a lot
of experience,
like with
MetroPCS in
the US. We are
building 5G
service on the
fly. We are
increasing
spending in
the US. This
is only
possible
because of the
synergies. If
we are not
getting this
deal I am not
seeing how
this can
happen
Q:
Do you know
Mr. Ergen
personally,
sir? Did you
try to reach a
merger with
him? A: It
never worked.
Q: What's your
impression of
him? A: Mr
Ergen is
perceived as
tough, not
easy to deal
with. Q: Does
that explain
the colored
works in your
texts? Forced
laughter
Now
Judge Marrero
is putting his
own questions
to Deutsche
Telekom's
Hottges. Judge
Marrero: Were
the DOJ
conditions a
monkey wrench
into the deal?
Hottges: There
was certain
thresholds we
couldn't go
beyond. Q: Is
the deal still
beneficial to
you? A: Yes.
Judge
Marrero: Will
the 9 million
pre-paid
customers make
it possible
for DISH to
really
compete?
Hottges: I
would not
distinguish
between
pre-paid and
post-paid. It
is just a way
of paying...
Hottges:
If he [Ergen
of DISH]
cannot go
beyond 9
million
customers, it
will be tough.
But he has
seven years.
There is no
reason he
cannot do
it....
Judge
Marrero
adjourned the
trial for 45
minutes, "so
you can have a
telephone
conference
with
Magistrate
Judge
Lehrburger."
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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