Sprint is unable to recover from crippling losses and has told regulators its purchase by T-Mobile would set up a stronger competitor to wireless leaders AT&T and Verizon. Customers are fleeing the smallest of the big four US nationwide providers at an increasing rate, Sprint told the Federal Communications Commission in a Sept. 21 meeting. Revenue is dropping and the company can’t cut much more after eliminating about $10 billion in annual costs.
Justice Department Antitrust Chief Makan Delrahim, who is leading a review of the proposed $26.5 billion merger of T-Mobile US with Sprint, says the elimination of one major competitor in wireless service isn’t necessarily a deal killer. The law and market economics will be the crucial factors, Delrahim said. “I don’t think there’s any magical number that I’m smart enough to glean about any single market,” he said.
T-Mobile’s John Legere and Sprint’s Marcelo Claure met with Federal Communications Commission Chairman Ajit Pai to sell their $26.5 billion deal. Legere and Claure also met with FCC Commissioner Brendan Carr.
A Google-led plan to overhaul how valuable airwaves are used for calls and texts is gaining momentum across the wireless industry, giving the company the chance to play a central role in networks of the future. Citizens Broadband Radio Service, or CBRS, is a fat slice of the US airwaves being freed from the military’s exclusive control. Instead of just zipping messages between aircraft carriers and fighter jets, the spectrum will be shared by the Navy, wireless carriers like Verizon, cable companies including Comcast, and even hospitals, refineries, and sports stadiums.
AT&T and Verizon, conceding that phones won’t be available in time for the launch of fifth-generation mobile service in 2018, plan instead to offer 5G through portable hotspots called pucks. “I would expect that there are a range of handsets available in 2019 and some of those will be in the first half of 2019,” said Verizon’s wireless chief, Ronan Dunne. “If there’s anything available in 2018, it’s more likely to be a hotspot.” In a race to be first with technology that will let cars drive themselves and robots perform surgery, the wireless service providers, including No.
A trade group of broadband providers including AT&T and Comcast pledged recently to not block or slow web traffic and otherwise avoid “unfair discrimination against lawful traffic online,” according to a statement. The group, Broadband for America, also represents companies including the largest wireless carrier Verizon. Comcast changed the language about its web practices that is posted on a corporate page in late April, as Federal Communications Commission Chairman Ajit Pai was announcing his intention to gut the Obama-era rules.
Apparently, AT&T will try to dig into whether the White House influenced the Justice Department’s review of the company’s planned takeover of Time Warner if the government sues to block the deal. In the event of a trial over the $85.4 billion deal, AT&T intends to seek court permission for access to communications between the White House and the Justice Department about the takeover, apparently. The Justice Department’s antitrust division is poised to file a lawsuit to stop the deal if it can’t reach an agreement with the companies.
Verizon Communications is close to a renegotiated deal for Yahoo! Inc.’s internet properties that would reduce the price of the $4.8 billion agreement by about $250 million after the revelation of security breaches at the web company, apparently. In addition to the discount, Verizon and the entity that remains of Yahoo after the deal, to be renamed Altaba Inc., are expected to share any ongoing legal responsibilities related to the breaches, said the people, who asked not to be identified discussing private information. An announcement of the new agreement could come in a matter of days or weeks.
Behind the Time Warner campus in Atlanta (GA), more than a dozen massive dishes silently stream CNN newscasts, Cartoon Network shows and Turner Sports games to satellites in outer space. They’re a vital link in the media giant’s global news and entertainment business. But they operate under licenses from the Federal Communications Commission, which means they also could be the biggest threat to Time Warner’s aspirations to merge with AT&T.
Time Warner has dozens of FCC licenses. Transferring them to AT&T would trigger a review by the agency, and the company is looking for ways to avoid that, according to a person familiar with the situation. Otherwise, the $85.4 billion deal could be exposed to an agency that’s been a graveyard for mergers. In theory, Time Warner could sell its dishes to an unaffiliated third party and enter into a contract with them for the same services -- but in that case, the buyer would need to ask the FCC for a license to provide services in the same location over the same airwaves, said Andrew Jay Schwartzman, senior counselor at the Georgetown University Law Center in Washington. It’s possible the FCC would accept the application without a fuss, Schwartzman said. But, he said, FCC officials also might say, “Wait a minute! We’re not stupid -- you are evading this review.”
AT&T has gone from a regional phone company to a national telecommunications powerhouse over the last decade. Its next big expansion will see it buying businesses to transform into a media and entertainment giant, apparently.
Over the next three to five years, AT&T will seek deals to become a producer of programming, shifting its business model so that it owns some of the content it distributes, said the people, who asked not to be identified discussing the company’s strategy. The company’s targets include companies worth $2 billion to $50 billion, apparently. Phone companies are trying to figure out their next steps for expansion as wireless growth flattens out and competition with cable providers remains intense. While its main rival Verizon has bet big on mobile advertising, AT&T is more focused on becoming a powerhouse in video programming. Having become the largest US pay-TV provider through the DirecTV deal, AT&T now faces a new set of challenges -- holding on to TV subscribers in an era of cord-cutting as well as fighting cable networks’ attempts to raise prices for their channels. Adding media properties to AT&T’s distribution business would give the phone carrier valuable insight for marketers into the viewing habits of its users, just as TV rival Comcast got in the acquisition of NBCUniversal in 2011. “The landscape has changed so much in the past 10 years. Strategically, going into media makes a lot of sense,” said Amy Yong, an analyst with Macquarie Capital USA Inc. “Owning content has become very important, not only for cost benefits but getting a stronger foothold among consumers.”