Daily Digest 5/01/2018 (AT&T-TimeWarner; T-Mobile/Sprint)

The outcome of AT&T's fight with the Justice Department over its bid for Time Warner could shape the regulatory review of the long-anticipated union of Sprint and T-Mobile. 

AT&T wins the case against DOJ: If the government loses, analysts expect a wave of new transactions from companies trying to keep up with the new media juggernaut. This spills into telecom, as well, as the two industries become more tightly entwined. Antitrust enforcers could be forced to make resource decisions: Suing to block a deal, and potentially going back to court, is a costly and time-consuming undertaking. If AT&T wins, the company will be more of a media powerhouse than a broadband and wireless provider —leaving CEO Randall Stephenson less likely to view a combined Sprint/T-Mobile as a serious competitive threat.
DOJ wins the case: Some say that signals the government will crack down on other deals as well. But each transaction is unique — and the current DOJ doesn't seem to be interested in playing the regulator role to the extreme. Even with a court victory, DOJ could still find a reasonable argument to let Sprint/T-Mobile go through. If AT&T loses the case, some expect Stephenson would pressure Federal Communications Commission and DOJ to give the Sprint/T-Mobile deal close scrutiny. Regulators would have denied his company’s attempts to buy both T-Mobile and Time Warner. He'd be likely to raise a ruckus.

As the two smaller players in a wireless industry dominated by four companies, T-Mobile and Sprint argue that they need to link up to effectively challenge Verizon and AT&T, and the creation of a new wireless behemoth — with nearly 100 million customers — will allow them to build out a national 5G network. T-Mobile CEO John Legere has already raised the specter of Chinese competition on the next-generation network technology. And although that argument will be thoroughly questioned by critics, it’s one that could get some play in the Trump administration. While the Obama-era FCC chairman Tom Wheeler also questioned the wisdom of similarly massive telecom deals, the current chairman, Ajit Pai, appointed to the post by President Trump, has seemed friendlier toward such proposals. “I don’t think any regulator who embraces regulatory humility and intellectual honesty about economics can say whether three or four or five [carriers] is the optimal number,” he said in 2017. “What I do want to see is a competitive wireless marketplace.” Phillip Berenbroick, senior policy counsel at Public Knowledge, questions whether the new, giant T-Mobile will be able to “steer clear of price wars” when it has a larger share of customers. Berenbroick says he see the FCC as “a much lower hurdle” compared to the Justice Department, which is “hurdle number one.” “I think what you’re likely to see is that if the parties convince the Department of Justice, then this FCC will probably be willing to go along with it,” he says.

One of the things that will enable T-Mobile and Sprint to move fast with their 5G integration is a not-so-little thing called Massive multiple-input, multiple-output (MIMO). Of course, it’s business as usual for each company while they make their case before regulators, but Sprint CTO John Saw said one of the things that will make for a faster integration is Massive MIMO, something Sprint has been working on for some time.  “With Massive MIMO we are able to actually upgrade existing towers,” Saw said. So they don’t need to look for new sites and towers, which is more efficient in terms of acquisition and zoning. With Massive MIMO, they're upgrading existing 2.5 GHz sites, basically enabling them to broadcast LTE and 5G at the same time, he said. “You kill two birds with one stone,” Saw explained, saving both time and money. ”We can move really, really fast. That technology will be used in a combined company. That’s one of the ways that we can move fast, by upgrading the combined towers and many of the 85,000 towers will have Massive MIMO capability that will allow us to cover big territories with 5G.”

The week of May 7, senators are planning to take a first step toward forcing a vote to restore the Federal Communications Commission's network neutrality regulations. Democrats have been gathering signatures under the Congressional Review Act to force a vote to overturn the decision by the FCC to repeal the net neutrality rules. Sen Ed Markey (D-MA) tweeted that Democrats will file the petition to force the vote on May 9. The vote could take place as soon as the week after. Senate Minority Leader Charles Schumer's (D-NY) office said, “We’re in the homestretch in the fight to save net neutrality. Soon, the American people will know which side their member of Congress is on: fighting for big corporations and ISPs or defending small business owners, entrepreneurs, middle-class families and every-day consumers.”

Sens Amy Klobuchar (D-MN) and Roger Wicker (R-MS) announced the passage of their legislation, the Precision Agriculture Connectivity Act of 2018, by the Senate Committee on Commerce, Science and Transportation. The bill would direct the Federal Communications Commission (FCC) to establish a task force to identify gaps in broadband connectivity for the nation’s cropland and ranchland. The measure also instructs the agency to develop ways to help encourage broadband adoption and precision agriculture in areas where it is currently unavailable. Specifically, the legislation outlines these tasks for the new FCC task force:

• Identify and measure current gaps in broadband coverage on cropland and ranchland;
• Develop policy recommendations, in consultation with the U.S. Department of Agriculture, to promote the rapid, expanded deployment of fixed and mobile broadband on cropland and ranchland, with the goal of achieving service on 95 percent of croplands and ranchlands in the United States by 2025;
• Recommend specific steps the FCC should consider to ensure that available farm data from the USDA is reflected in the development of future FCC programs dedicated to the deployment of broadband infrastructure to croplands and ranchlands; and
• Develop a public report detailing the status of fixed and mobile broadband coverage on croplands and ranchlands; the projected future connectivity needs of agricultural operations, farmers, and ranchers; and the steps being taken to accurately measure the availability of broadband on croplands and ranchlands and the limitations of current measurement processes.

As streaming video continues to chip away at cable TV subscriber numbers, Comcast is making some of its Internet speed increases available only to customers that pay for both Internet and video service. The week of April 23, Comcast announced speed increases for customers in Houston (TX) and the Oregon/SW Washington areas. The announcement headlines were "Comcast increases Internet speeds for some video customers." Customers with 60Mbps Internet download speeds are being upped to 150Mbps; 150Mbps subscribers are going to 250Mbps; and 250Mbps subscribers are getting a raise to 400Mbps or 1Gbps. Comcast says speed increases will kick in automatically without raising the customers' monthly bills—but only if they subscribe to certain bundles that include both Internet and TV service. "Cord cutters are not invited to the [speed increase] party," the Houston Chronicle wrote. "Only those who bundle Internet with cable television and other services... will see their speeds go up at no extra charge." 

Twitter sold data access to the Cambridge University academic who also obtained millions of Facebook users’ information that was later passed to a political consulting firm without the users’ consent. Aleksandr Kogan, who created a personality quiz on Facebook to harvest information later used by Cambridge Analytica, established his own commercial enterprise, Global Science Research (GSR). That firm was granted access to large-scale public Twitter data, covering months of posts, for one day in 2015, according to Twitter. “In 2015, GSR did have one-time API access to a random sample of public tweets from a five-month period from December 2014 to April 2015,” Twitter said. “Based on the recent reports, we conducted our own internal review and did not find any access to private data about people who use Twitter.” The company has removed Cambridge Analytica and affiliated entities as advertisers. Twitter said GSR paid for the access; it provided no further details.