The Trump DOJ/FCC 'Fix' For The Crappy T-Mobile Merger Isn't Looking So Hot

from the regulatory-theater dept

Economists repeatedly warned that the biggest downside of the $26 billion Sprint T-Mobile merger was the fact that the deal would dramatically reduce overall competition in the U.S. wireless industry. Data from around the globe clearly shows that the elimination of one of just four major competitors sooner or later results in layoffs and higher prices due to less competition. It's not debatable. Given U.S. consumers already pay some of the highest prices for mobile data in the developed world, most objective experts recommended that the deal be blocked.

It wasn't. Instead, the Trump FCC rubber stamped the deal before even seeing impact studies. And the Trump DOJ not only ignored the recommendations of its staff, but former Trump DOJ "antitrust" boss Makan Delrahim personally helped guide the deal's approval process via personal phone and email accounts. Both agencies, the vocal chorus of telecom-linked industry allies, and many media outlets all behaved as if all of this was perfectly legitimate and not grotesquely corrupt.

At the heart of the DOJ's approval was a flimsy proposal that involved giving Dish Network some T-Mobile spectrum in the hopes that, over seven years, they'd be able to build out a replacement fourth carrier. As we noted at the time, there was very little chance this plan was ever going to work. In part because the remaining three wireless carriers (T-Mobile, Verizon, AT&T) have every incentive to fight against a major fourth wireless competitor emerging from this mess. But also because Dish has a long history of spectrum hoarding and empty promises in wireless (just ask T-Mobile circa 2019 or so).

And there have been several hints that we're already stumbling along this doomed trajectory. Including the 6,000 layoffs (so far) that the merging companies promised wouldn't happen if regulators approved the deal.

Last week, for example, Dish Network complained to the FCC that T-Mobile wasn't being particularly cooperative on a number of fronts, including their supposed spectrum and network sharing arrangements. To help build this "new" fourth wireless network, T-Mobile gave prepaid mobile brand Boost Mobile to Dish. But Dish is annoyed that the Sprint CDMA network, which is currently in use by many of these customers, is being shut down prematurely, making it harder for Dish to get an operational foothold:

"Dish's letter to the FCC addresses a range of concerns, but the largest issue relates to the shutdown of the CDMA network that had previously been used by Sprint and is still used by the majority of Dish's 9 million Boost Mobile subscribers...Dish had expected that T-Mobile would eventually look to shut down that network in three to five years, according to people familiar with Dish's thinking. But Sprint said late last year that it would look to shut it down far earlier, on Jan. 1, 2022.

But Dish's letter also generally complains about something else. Namely, that post-merger, T-Mobile is acting a lot more like AT&T and Verizon (which it used to mock), and a lot less like the consumer-centric company that disrupted the market in the first place:

"In the letter, Dish also accuses T-Mobile of flip-flopping on other spectrum issues. Where T-Mobile previously pushed for policies encouraging smaller competitors, Dish says T-Mobile is now adopting the same tactics as AT&T and Verizon.

"During its earlier life as the 'Un-Carrier,' T-Mobile championed policies that promoted competition, diverse spectrum ownership, and efficient spectrum use. How quickly things change," Dish says in its letter. "Now, T- Mobile opposes measures that would help new entrants and smaller providers compete."

This should surprise absolutely nobody, including Dish. When you reduce overall competition via consolidation, the remaining competitors will always take full advantage. People like to debate this stuff, but it's like debating whether water will be influenced by gravity. It (layoffs, higher prices, worse service) happened in numerous other countries (Germany, Canada, Ireland) that saw a 4-3 sector consolidation, and, as US regulators increasingly rubber stamp mindless merger mania in wireless, it's going to happen here. And absolutely nobody responsible for it will take ownership when rates skyrocket a few years from now.

Filed Under: ajit pai, competition, doj, fcc, makan delrahim, mergers, mobile
Companies: dish network, sprint, t-mobile

Dish Pulls CNN, Doesn't Think Customers Still Paying For It Are Missing Much

from the you-really-don't-want-to-buy-what-I'm-selling dept

As another shining example of the fading value proposition of traditional cable, Dish Network last month pulled all Turner Broadcasting stations (including CNN, Headline News, and Cartoon Network) from their lineup because the two sides couldn't agree on a new retransmission fee contract. As we just got done saying, these feuds are growing more and more annoying as paying consumers not only lose access to content, but get bombarded with marketing missives as both sides try to blame the other guy for being greedy (See Turner's SaveMyShows.com website and Dish's DishStandsForYou.com website).

In Dish's case, customers have lost access to content but they're still paying the same rates. Yet speaking this week on the company's earnings call, Dish CEO Charlie Ergen told customers eager to watch election coverage that not only may they never get CNN back, they really shouldn't miss it because nobody watches cable news these days anyway:

"When we take something down we’re prepared to leave it down forever. Things like CNN are not quite the product that they used to be. You can imagine: CNN down on election night would have been a disaster 15 or 20 years ago. Now there are plenty of other places for people to get news. In fact a lot of people get news not from TV but from their devices."

While that might be true (given that CNN, like most cable news, is now more unintentional cultural satire than news), it's odd to hear a cable exec telling people they don't need to buy what he's selling, especially since the majority of cable channel lineup bundles are increasingly bloated with similarly-inane content. Ergen added that while the company does listen to customers, they're not going to here, since it's nice that Dish will save a buck:

"If we’re not going to be in a relationship with Turner then we would not have to raise our prices next year. And that would be slightly cash positive for us from a cash flow perspective. Yes, we listen to customers. But we would save a big, big, big check from a cash flow perspective. And for those folks who don’t care about news and cartoons, we have other news and cartoon shows."

Again, that's probably not particularly comforting to Dish customers who are getting less content yet paying the same amount of money to Dish.

Some of this is just traditional Charlie Ergen negotiations bluster, given it's hard to sell TV content if you tell all of the people making it to go to hell. Unlike many cable execs, Dish and Ergen do see the cord cutting writing on the wall, and are planning to launch a live Internet video service sometime before the end of the year. However, that service again relies on the good graces of the broadcasters if it's going to survive; the same broadcasters who've been waging legal war against any disruptive technology that could possibly topple the traditional cable cash cow, whether it's Dish's automatic ad-skipping DVR or Aereo. Turner says they were originally on board with the project, but after the last month's feuding says they're reconsidering the green light.

Even if it's a little ham-fisted, Ergen's trying to make the point that the current TV ecosystem and these often bi-annual rate hikes simply aren't sustainable. It's the same point being made by small and mid-sized cable companies that have started to leave the cable business entirely because they can't afford to participate, and it's same point being made by cord-cutters who are tired of paying an arm and a leg for an ocean of crap content.

Filed Under: cable tv, charlie ergen, cnn, retransmission, retransmission fees, tv
Companies: dish, dish network, turner

News Corp. Accused Of Hacking Competitors Smartcards To Increase 'Piracy' Of Satellite TV Rivals

from the all's-fair-in-murdoch-land dept

Four years ago, we wrote about claims that News Corp. had hired hackers to break the encryption on DISH Networks' satellite TV smart cards, and to "flood the market" with those cards, thereby increasing "piracy" of DISH's service. News Corp., of course, owned DISH's main competitor, DirecTV. The whole thing seemed really bizarre, and we were skeptical. This kind of thing only makes sense if you actually believe that "piracy" like that directly takes away money from the company whose service is hacked. But, it seems just as likely that flooding the market with hacked smartcards would take away business from both DISH and DirecTV in the cases where it was a true substitute (rather than going to people who would never pay for either anyway). Either way, that case ended with a jury finding News Corp guilty... but of just hacking one smartcard, for which the company was fined a grand total of $49.69... and another $1,000 for "damages." Honestly, I'm not even sure that makes sense, because if it just hacked a single smartcard, it sounds like it may have just been for reverse engineering purposes.

Of course, in the intervening years, News Corp.'s name has become a lot more closely tied to the word "hacking" thanks to the News of the World scandal where reporters regularly "hacked" into voicemails (and, by "hacked" I really mean used a widely known loophole that makes it easy to listen to many people's voicemails). So with news breaking that News Corp. is again being accused of hacking, a lot of people are thinking about the recent scandals -- but the details suggest that this may have been identical to the DISH/DirecTV story above, but with a UK focus. Basically, News Corp's subsidiary NDS is accused of hacking ITV Digital, a UK competitor to News Corp's Sky TV.

In this case, there are some more details, where it certainly suggests that at least someone at News Corp. was working closely with some hackers to publish the codes necessary to make unauthorized smartcards for ITV. ITV eventually did go out of business, and of course the article linked above quotes an exec there insisting that such "piracy" was "the killer blow for the business, there is no question."

Again, this doesn't make much sense to me. Even if all of these actions were done via News Corp., how does that actually help News Corp? People who got the hacked ITV smartcards weren't going to buy Sky TV services either. The whole thing seems pretty strange, suggesting it was either exaggerated, or whoever at News Corp. decided this was a reasonable strategy didn't even think about how getting more hacked smartcards would likely be a challenge for Sky just as much as it was for ITV.

Filed Under: competition, hacking, james murdoch, piracy, rupert murdoch, satellit tv, smart cards
Companies: directv, dish network, itv, news corp., sky tv

Dish Network Wants To Make Hulu Even More Useless

from the fighting-consumer-interests dept

It's really sad watching the TV industry shoot itself in the foot. You would think that, given the opportunity to watch the music industry and the movie industry screw up their attempts to deal with the online world, the TV folks (of everyone) might recognize that fighting "free" and fighting what consumers want to do is a mistake. And yet, we've seen over and over again, the TV guys are fighting the internet as much as possible, because of various deals that make them billions (at the expense of consumers) and from which they have no desire to go away. It's why they remain in complete denial that people are actually cutting the cord and going online-only.

However, while they're in denial publicly, they clearly are afraid of the internet. It's why they keep forcing Hulu to do stupid things that limit what users want, guaranteeing that the real disruption in the TV-online space will come from companies other than Hulu. But, even so, the TV guys keep looking to make Hulu even worse for consumers than it already is. The latest example is a Dish Network exec claiming that Hulu shouldn't make content available for free right after it airs, instead saying that it should wait 30 days. Why? Because Dish wants people to be forced to keep their satellite subscription to Dish, where they can catch up on missed shows via the disastrous "TV Everywhere," plan.

There is no good reason for Hulu to support this. All it does is encourage unauthorized access to content by making it harder to find legally. But what it does show, quite clearly, is that a company like Dish doesn't care at all about what consumers want or what's best for consumers. Yet another reason why it's ripe for disruption.

Filed Under: internet, tv
Companies: dish network, hulu

Dish Network Lies About Having 200 HD Channels, Hopes Nobody Notices

from the your-customers-can-count-you-know dept

For several years TV carriers have enjoyed bickering over which company has the most HD channels, in part because it creates a debate focused on perceived value -- and steers the conversation away from who offers the lowest prices (or the fact that companies seem to impose annual or bi-annual TV hikes in unison). Carriers only just recently surpassed the 100 HD channel count, so it was surprising this week when Dish Network suddenly and proudly announced that the company was the first to pass the 200 HD channel mark -- insisting "only DISH Network has delivered" on this supposedly-epic promise. Except amusingly, Dish Network didn't bother to include a full list of the channels they added, and when reporters and bloggers on the TV/telecom beat started asking Dish questions, the company started getting a little bit uncomfortable:

"I asked Dish Network's PR department for a list of the 200 HD channels, numbered from 1 to 200. Not too surprising, the company was evasive, saying the 200 HD channels could be found at its web site. However, when I told them I could not locate more than around 130 HD channels listed at DishNetwork.com, the company's PR department got even more evasive -- and started to act a bit strange. At one point, a company spokeswoman said she could give me a breakdown of the 200 HD channels on "background only," meaning I couldn't attribute the information to Dish Network."

As it turns out, Dish's marketing department had gotten creative -- and was suddenly counting 57 different On Demand movie titles as"channels" (the Alvin & The Chipmunks 2 channel, anyone?) and just hoped that nobody would notice. So instead of being seen as the TV operator that offers the most HD channels, Dish Network is now being seen as the TV operator who assumes everybody is stupid, which we'll assume wasn't what the company's PR department was aiming for.

Filed Under: hd, television
Companies: dish network

Dish And DirecTV Figure If XM And Sirius Can Merge...

from the try-try-again dept

You may remember back in 2001 that EchoStar, then owners of the DISH Network, tried to buy DirecTV from then owner Hughes (who was owned by GM at the time). However, after the Justice Department said no to the deal over antitrust concerns, it fell apart. However, the rumors going around are that the two companies (now just DISH Network and DirecTV, sans various parent companies) are thinking about trying again. Apparently, they believe that the regulatory and competitive environment that doomed round 1 wouldn't happen in round 2. And, of course, this time around, they can point to the fact that the two satellite radio systems, XM and Sirius, were allowed to merge (even if it took a year and a half).

Filed Under: antitrust, mergers, satellite tv
Companies: directv, dish network

News Corp Found Guilty Of Hacking Only A Single DISH Smart Card

from the that's-not-gonna-hurt dept

Last month we wrote about the strange case of DISH Networks accusing a News Corp subsidiary of hacking its smart cards and distributing them. This seemed really unlikely, as there was little incentive for the company to do so. The company did admit to reverse engineering DISH Networks technology (which is perfectly legal). It appears that a jury wasn't particularly convinced either. It did find the subsidiary guilty of hacking one single smart card, for which the company was fined $49.69 (ouch!), and then the court added another $1000 for "damages." So, technically it's a "victory" for DISH, but probably not to the level it was expecting.

Filed Under: hacking, satellite tv
Companies: dish network, echostar, news corp

Why Is Kevin Martin Advertising The DTV Switch On Dish Network?

from the confusion-reigns dept

Last week, we noted that the GAO was concerned that the FCC didn't have plans in place to educate consumers about the switch from analog TV to digital TV, set to take place in February of 2009. Kevin Martin and the FCC shot back that the GAO was incorrect, and it has an education campaign well planned out. It would appear that's true, but that campaign is already raising some controversy. Reader MaxB312 writes in to point us to a Public Service Announcement that Martin himself filmed for Dish Network: As the summary of the video makes clear, some people are interpreting this commercial to be a sly way of suggesting that those who have analog TV should just sign up for Dish rather than getting a converter. Martin makes it clear that Dish Network subscribers have nothing to worry about, since this only impacts free over-the-air (FOTA) TV, and then says "but if your TV has rabbit ears or a rooftop antenna, you'll need a satellite box or a converter box." The problem is that you really only "need" a converter box -- not satellite. A satellite box would get you entirely beyond the issue of FOTA TV. Of course, so would a cable service -- which Martin doesn't mention at all. No wonder, since he apparently has it in for cable companies. While I don't necessarily buy the conspiracy theory that this is an attempt to help out satellite providers, it does raise an important question: why is the FCC advertising this to people for whom it won't matter? Why would the FCC put PSAs on either satellite or cable TV offerings when the switch doesn't impact those people at all? Perhaps the GAO's real complaint wasn't that the FCC didn't have a plan on how to educate people -- but that the plan consisted of educating the wrong group of people. Update: Well that answers that. As a bunch of folks noted in the comments, it's mainly targeted at rural areas where the broadcast OTA stations aren't all available via Dish.

Filed Under: converters, digital tv, fcc
Companies: dish network, echostar