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In Sprint Trial Legere of T-Mobile In Magenta Tie Tries To Super-Charge SDNY

By Matthew Russell Lee, Patreon

SDNY COURTHOUSE, Dec 12 – 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. Day IV here. More D4 on Patreon here.

  On December 12, T-Mobile's John Legere took the stand. He was wearing a black jacket and a magenta tie; he'd had to wait while a Comcast witness testified. Here's some of how it went:

Q: Can you tell me what the un-carrier is?

John Legere , launching into it: There was a way of being very successful by being the exact opposite of them. Identifying pain points for the customer and solving them. I said, we are going to fix a stupid industry.

 Legere: We said, we can be different than them, and successful. 

Judge Marrero: Is there any relation between the un-carrier and the UN Cola?  Some laughter in the courtroom.  Lawyer: We'll leave the Un Cola for another trial.

 Q: Did you memorialize this un-carrier in a document? Legere: In the very beginning when I was attempting to take this company with a high churn rate, & tell them, we are going to fix this industry. It was quite possibly an arrogant statement. We wrote a manifesto

 Legere: Every time we do an un carrier move, it is to make everyone else follow. I tell customers, we won't stop. Q: Did you share the manifesto? A: Yes. My majority shareholder was a bit confused about this un carrier and what was going to take place.

 Legere: In early 2013, I gave a talk to 1500 Deutsche Telekom executives. I read them the manifesto. And that was the starting point. Q: Turn to exhibit 5103.... "We are unafraid to innovate." Is that what your read to the DT executives? Legere: Yes, I did.

Q: "We are the un carrier, we will be unrelenting." Have you been that? Legere: We have. Q: Describe how these principles are unleashed... un carrier moves. Legere: The move to identify pain point and solve them - were customers willing to tell you what they were?

Legere: I was doing an event in Las Vegas with Joe Torre, an announcement with Major League Baseball. But all the questions were about the un carrier. The first was to eliminate contracts. I would leak out through social media, save the date.  

Legere: It's not of the quality of a Tesla event, but we do a pretty good job. Q: OK, I'm not going to take the court's time for each un carrier move. 5015, 5017, 5021, 5023, 5042 - there are a lot of them - 5117, 5192 and 5290. Judge Marrero: Will that be enough?

 Q: If you could turn, Mr Legere, to exhibit 5088, un carrier 10, binge on.  Legere: When customer started using video streaming, we listened to customers. Interesting, sometimes they say the most ridiculous things, you don't think you can do it. But you can.

 Legere: We didn't even have the i-Phone. Apple wouldn't give it to us unless we could show nationwide 4G. Q: What if this merger doesn't move forward? Legere: We no longer have "line of sight" of where we need to go. It's going to require significant investment

 Legere: The 5G network capability it will create is unlike anything that exists in the world so far. The creation of the company has a self-funding nature to it. It will [would?] super-charge the un carrier.

Q: Thank you Mr. Legere. Let's turn back to challenges Q: So you wrote positively about a merger of T-Mobile and DISH? Legere: Yes, as long as it didn't preclude secondary or tertiary transactions.  Q: You like the word "super-charge," don't you? A: Yes, I aspire to it.

 Q: And isn't it correct, Mr. Legere, what you view a merger of T-Mobile and DISH as just as good as a merger between T-Mobile and Sprint?

John Legere : There is no comparison at all. Q: You said, "I don't believe I have ever thought one was better than the other"

 Q: So if this merger doesn't happen, DISH is still out there with a treasure trove of spectrum, right? Legere: And some serious commitments to build it out or lose it. Q: You could call them up and say let's talk. Legere: I don't think there's any comparison.

 Q: That's not my question. You would pick up the phone and call DISH. Legere: I'm not sure that's the case... I cannot provide any specificity about what we would do. Q: Let's look at your deposition again.

 Q: in 2014, you acquire spectrum from Verizon, right? A: I'll take your word for it.  Q: And spectrum is very market specific, right? You might be strong in Chicago but weak in Denver... You could lease from DISH? A: At any price, could go anywhere 

Judge Marrero calls it a day, adding that plaintiffs have used 15 hours and 10 minute. Defendants 7 hours and 27 minutes. If you violently disagree, the timekeepers can confer. More on Patreon here.

 Overnight there was a fight about a Morgan Stanley document - more 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.

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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