DOJ Antitrust Boss: ‘You Learn More From Losing’

Following legal rebuke at the lower federal court and subsequent appeals court level regarding efforts to block AT&T’s $84 billion acquisition of Time Warner, the Department of Justice’s Makan Delrahim, head of the agency’s antitrust unit, said more was learned in defeat than in winning the litigation.

Speaking March 20 at the American Communications Association’s confab in Washington, D.C., Delrahim said legal challenges to future corporate vertical mergers — such as Sprint’s pending merger with T-Mobile — were empowered following the AT&T/Time Warner challenge.

“There are many lessons to be learned from the U.S. v. AT&T,” Delrahim said, according to a recording released by the ACA and reported by Deadline.com. “Given the standard of review that we were facing, [the outcome] wasn’t a surprise. You learn more from losing than from winning.”

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Specifically, the executive contends future legal challenges by the DOJ will be based more on structural changes rather than behavior.

Delrahim said the government’s approval of Comcast’s $30 billion acquisition of NBC Universal in 2009 revolved around behavior/consent remedies the cable giant was beholden to follow for a number of years — including silent partnership in Hulu.

Similar regulatory approach to AT&T/Time Warner wouldn’t have been worth the compromise, according to Delrahim.

“The AT&T offer will expire in less than seven years,” he said. “The new market structure [i.e. WarnerMedia] created by the transaction will remain indefinitely. If there’s harm that the arbitration offer is necessary to solve, then there’s likely to be harm in the future that will remain after the arbitration offer expires.”

Delrahim said the silver lining from the appeals court ruling was that some vertical mergers can be harmful to consumers — provided the government proves its case.

“The [appeals court] corrected many of the District Court’s misstatements and articulated a standard that is valuable,” he said.

Sprint Calls Out AT&T Over ‘False’ 5G Claims

Next-generation 5G wireless technology continues to get a lot of attention (and hype) — notably as an enhanced distribution channel for mobile video entertainment.

AT&T and Verizon have been among the first wireless carriers offering 5G networks in the country. AT&T last December said it become the first telecom in the United States offering 5G wireless service over a commercial, standards-based mobile 5G network.

Indeed, consumer awareness of the fifth-generation wireless technology successor has reached mainstream, according to new data from The NPD Group.

Yet, 5G is still more marketing than reality. Availability of 5G-compatible phones to consumers might occur by the end of the year — with mainstream usage on par with 4G LTE years away, according to analysts.

That’s why Sprint is calling foul on AT&T regarding what it claims are false advertising and deceptive acts by the corporate parent to WarnerMedia to confuse consumers.

Sprint, which claims to have 54.5 million subscribers and is attempting merge with T-Mobile, took out a full-page ad in the March 10 edition of The New York Times accusing AT&T of allegedly deceiving consumers into believing that their existing 4G LTE network operates on a much-coveted and highly anticipated 5G network.

A recent survey commissioned by Sprint found 54% of consumers mistakenly believed, based on AT&T’s claims, that the company’s 5G E network is the same as or better than a true 5G network. Another 43% of consumers wrongly believed that if they were to purchase an AT&T phone today, it would be capable of running on a 5G network.

“AT&T is not offering its customers 5G but is delighted by the confusion they’ve caused with their deceptive ‘5G E’ marketing and attempt to convince consumers that they’ve already won the 5G race,” David Tovar, SVP, corporate communications, at Sprint said in a statement. “We’re not standing for this kind of deception, and neither should consumers.”

Indeed, Sprint filed a federal lawsuit asking that AT&T’s ads be stopped.

“Every carrier – every company – should tell consumers the truth and be held accountable for the promises they make,” Tovar said.

An AT&T representative wasn’t immediately available for comment.

 

 

 

 

Comcast Throttling Mobile Hotspot Speeds, Lowering Video Resolution

Comcast has begun informing Xfinity Mobile subscribers that it plans to drop video resolution from 720p HD to 480p (DVD quality), including subs on unlimited data plans. Subs seeking to maintain 720p resolution, are advised to use one of Comcast’s 19 million Wi-Fi hotspots nationwide.

The media giant launched Xfinity Mobile in May 2017 and ended the first quarter (ended March 31) with more than 577,000 subscribers.

With over-the-top video services such as Netflix, Amazon Prime Video and Hulu pushing for greater mobile viewing, data usage on mobile networks is soaring.

Two years ago, Netflix began throttling its video streams to subscribers using Verizon Wireless and AT&T mobile networks to 600kbps to help users stay within their data caps. Sprint and T-Mobile offer unlimited data plans that reduce streaming speed when subscribers exceed their data caps.

“We believe restrictive data caps are bad for consumers and the Internet in general, creating a dilemma for those who increasingly rely on their mobile devices for entertainment, work and more,” Netflix wrote in a blog post at the time.

Comcast said the new restrictions would help it reduce the cost of delivering mobile video to subscribers. It also offers subs the option to pay “By the Gig” ($15 per GB), that drops streaming speeds to 1.5Mbps when usage exceeds 20GB per month.

“Starting July 16, you can call us at (888) 936-4968 to enable HD streaming on an interim basis. In the future, HD-quality video will be available as a fee-based option with your service,” Comcast said.

T-Mobile, Sprint Agree to Merge

As expected, wireless telecom carriers T-Mobile and Sprint April 29 announced entering into a definitive merger agreement. The $26.5 billion all-stock transaction values the combined companies – to be known as T-Mobile – around $146 billion with about 100 million subscribers.

The new company will be headquartered in Bellevue, Wash., and led by current T-Mobile CEO John Legere, with current T-Mobile COO Mike Sievert assuming the same position in the new operation.  Masayoshi Son, CEO of SoftBank Group, which owns Sprint, and Marcelo Claure, CEO of Sprint, will serve on the board of the new company.

“This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses … and do it all so much faster than either company could on its own,” Legere said in a statement. “As industry lines blur and we enter the 5G era, consumers and businesses need a company with the disruptive culture and capabilities to force positive change on their behalf.”

Driving the oft-rumored merger is growing nationwide rollout of 5G wireless technology. With Comcast, Verizon, AT&T and Charter all launching the new technology, which claims to deliver faster mobile broadband networks, which claims video download speeds up to 10 gigabits per second.

5G is expected to create 3 million jobs in the United States and $500 billion in economic growth by 2024, according to a report from CTIA, a wireless technology trade group.

Faster video access is key to Netflix, which last year entered into a marketing deal with T-Mobile giving new data subscribers free access to the subscription video-on-demand behemoth.

“Going from 4G to 5G is like going from black and white to color TV,” Claure said. “It’s a seismic shift – one that only the combined company can unlock nationwide to fuel the next wave of mobile innovation.”

Like any major corporate merger, federal regulators have to sign off on it – no certainty into today’s M&A landscape as the Justice Department wages a legal battle against the merger of AT&T and Time Warner.

T-Mobile claims the combined company will employ more than 200,000 people, generate lower operating costs, greater economies of scale and network capacity, which it claims should make wireless, and adjacent industries like cable and broadband, more affordable for everyone.

Five years ago, T-Mobile merged with MetroPCS to better compete in the 4G market – a transaction it claimed resulted in substantial job growth. Three times the number of people work at MetroPCS today compared to the time of the acquisition in 2013.

The new T-Mobile claims it would accelerate long-term economic stimulus for the U.S. in 5G, leading to the creation of thousands of domestic jobs and supporting business opportunities for the U.S. economy.

“We’re confident that, once regulators see the compelling benefits, they’ll agree this is the right move at the right time for consumers and the country,” said Legere.