Wall Street Stock Jocks Are Worried About A Modest Uptick In Broadband Competition

from the oh-no,-not-competition! dept

For decades, America's entrenched broadband monopolies have had it pretty good. Despite a brief blip there during the Wheeler FCC years, they've been hugely successful in gutting most of the meaningful regulatory oversight of natural monopolies. At the same time, they've been damn successful in using their political power to limit the threat posed by smaller competitors. The end result should be fairly obvious to those with eyes: Americans pay some of the highest rates in the developed world for patchy, slower service, and US broadband providers see some of the lowest consumer satisfaction ratings of any industry in America.

This is, it should always be remembered, a choice. For thirty straight years the central policy narrative in the US has been that if you mindlessly eliminate government oversight of regional monopolies with a generation of bad behavior under their belt, magic happens. You're to ignore that this promised telecom Utopia somehow never materializes despite twenty straight years of mindless deregulation, rubber stamped mergers, and the steady erosion of even baseline consumer and market protections.

With 5G deployment speeding up and promising new low-orbit satellite options on the horizon, Wall Street is starting to get nervous once again. They're also starting to get nervous about the threat that the Biden administration might actually engage in some base-levels of regulatory oversight. The consternation in investment circles is palpable:

"The 10-plus-year run cable stocks have enjoyed has been underpinned by the emergence of these companies as leading providers of residential broadband in the U.S. amid faltering competitive initiatives from players as large as Google," he said in a recent report to clients. "We are now entering a new competitive and regulatory cycle. While we currently think that history will repeat itself and risks will dissipate as they have in the past, it is far from certain and the group could be more volatile pending clarity."

That's Wall Street saying they think that monopolistic giants like Comcast won't see much of a threat to its revenues, but they're not sure. I always get a kick out of watching telecom trade mags and stock jocks, who genuinely couldn't care any less about consumer welfare, healthy markets, or level playing fields, hyperventilate over the faintest threat of competition and competent regulatory oversight. Genuine competition, balanced markets, and regulatory competence is consistently framed as a bad thing, since, for them and many of their clients riding the profits from rampant monopolization, it is.

The problem, as we've noted for a while, is that a lot of the "new competitive broadband threats" facing companies like Comcast aren't really all that threatening. Space X's Starlink, for example, doesn't really have the capacity to seriously threaten entrenched cable and phone companies in areas that have any real population density. And while fifth-generation wireless (5G) is also viewed as some kind of competitive panacea, consolidation in wireless (which will eventually lead to higher prices), fused with a persistent refusal to drive fiber to lower income areas (5G towers have to connect to something), remain a problem.

While 5G wireless broadband will certainly be useful, it's not going to magically fix an industry that's been broken for decades. Wireless connections are routinely capped, throttled, and face a universe of bizarre restrictions, like the industry's recent decision to charge you more money if you want HD streams to work as intended. "Unlimited" connections are routinely shown to be very limited (just ask California's firefighters), especially in more rural markets where limited fiber investment results in many users getting kicked off the network for using often ambiguous amounts of bandwidth.

So no, I see 5G and low orbit satellite as of genuine benefit when it comes to fixing some of America's rural broadband gaps (42 million Americans lack access), but not technologies that are going to seriously disrupt the AT&T and Comcast monopolies of the world (83 million Americans live under a broadband monopoly). I think the Wall Street stock jocks who've enjoyed ample profits under heavy monopolization don't yet have all that much to worry about.

Wall Street's also clearly worried about the potential that the Biden administration might actually engage in base-levels of regulatory oversight of telecom, but it's not yet clear that's a major threat to Comcast either. Biden has yet to appoint an FCC boss, meaning the agency remains in partisan gridlock after the rushed Trump appointment of Nathan Simington.

It's generally assumed that a Biden FCC will reverse most Trump policies and restore net neutrality, but I still don't think a full reversal is a given yet. I think it's equally possible a Biden FCC takes the safe path and mostly focuses on stuff that's easy politically and faces no real opposition from industry, like policing robocalls or opening up more spectrum to market. We'll have a better sense of this depending who Biden appoints to lead the FCC permanently.

And while the vague Biden broadband plan does promise to drive more competition to market, talk on this front is historically cheap. Over twenty years of covering telecom I've lost count of how many transformative promises of this type have been bandied about with little to really show for it. There are also questions about plan specifics, and how it's supposed to survive a Congress positively slathered in telecom campaign contributions.

It's fairly clear that Biden administration will be notably better than the Trump administration on broadband in one major way: the fact they're using real data to drive policy decisions, a stark contrast from the Trump / Ajit Pai era of just making shit up to support your monopoly-friendly ideology. But with "big tech" sucking all the oxygen out of the policy room (something "big telecom" has actively and repeatedly encouraged), it's still not entirely clear we're taking the problems created by "big telecom" seriously, or if we plan to genuinely do much about it anytime soon.

Filed Under: broadband, competition, wall street

Will Wall Street Get In The Way Of Jack Dorsey's Lofty Plans To Turn Twitter Into A Protocol?

from the that-would-suck dept

A year ago, I was at a round table discussion, where someone was doing one of the standard rants we've all heard, about how big internet companies were evil because they were focused on profits over the health of their user base, etc. I pointed out that while this narrative had taken hold among many people outside of these internet companies, it didn't seem to reflect what I was hearing from those within those companies -- especially as they were investing heavily in "trust & safety" teams, including both hiring people and building technology, that would provide better overall experiences on the platform. Instead, I suggested, their complaint seemed to be more with Wall Street investors, and the short term profits that it demanded from many public companies. There are the Jeff Bezos/Amazon exceptions -- where he basically told Wall Street to go put their head in a bucket for many years while he re-invested in the business as they demanded profits -- but for the most part, public companies are put on a short leash, not so much by management expectations, but the demands of investors.

I'm thinking about that a lot again, following the news of the proxy fight over Twitter's management that was raised just recently. At the beginning of the month, it was revealed that Paul Singer's massive hedge fund Elliott Management had taken a large stake in Twitter, and wanted major changes, including getting rid of founder/CEO Jack Dorsey. A few days later, it was revealed that a deal was struck between Twitter and Elliott Management to keep Dorsey in charge... for now. However, it seems that the situations is fairly tenuous. Elliott Management now has a board seat, and a promise of some very tricky "growth" targets (especially tricky in the face of who knows what's coming with the economy during a pandemic).

The details of those metrics makes it seem clear that Elliott Management is forcing Twitter down a specific path -- one that is likely to make the user experience for Twitter users much, much worse:

As part of the deal, Twitter has committed to reach certain growth and revenue goals. It promises to grow its average number of daily users who can see ads by 20 percent or more in 2020. This is not impossible; in 2019, Twitter nosed past that threshold. But it may be tougher this year, what with a pandemic and maybe a recession. Twitter also vows to “accelerate revenue growth on a year-over-year basis and gain share in the digital advertising market.” (This will be tied to specific numbers as yet undetermined.) This bigger share would most likely have to come at the expense of Google or Facebook, which aren’t exactly pushovers. If Jack doesn’t perform, the committee won’t be happy.

This is crazy on multiple levels -- and seems likely to harm Twitter's long term objectives in a demand to focus solely on the advertising model to make it work. That's going to piss off users, and potentially drive down usage, just to make these Wall Street short termers happy.

My even bigger fear, however, is that this will make it nearly impossible for Dorsey and Twitter to follow through on the company's stated belief in moving to an open protocol, rather than remaining a proprietary platform. Moving to a protocol, while potentially opening up new revenue streams, would likely cause at least a short term problem for Twitter's traditional ad revenue business. And given the short term nature of the investor's mindset, they seem unlikely to allow the company to really push forward with such a radical change. And, of course, if Dorsey is eventually pushed out by the board, whoever takes over may not care at all about the open internet and a protocols-based approach. I think that would doom Twitter over the long run, but Wall St. doesn't much seem to care about that.

Hopefully this isn't how things play out, but it is concerning. It's also a reminder that whenever people insist that it's the folks at the internet companies driving for profit over all else, it might actually be Wall Street and the broken structure of our public markets, that basically require a short-term, profit-maximization model over a long-term sustainable model.

Filed Under: advertising, jack dorsey, paul singer, platforms, profits, protocols, short term, wall street
Companies: elliott management, twitter

Wall Street Thinks The Cable TV Sector Could Easily 'Unravel.' That's Probably A Good Thing.

from the adapt-or-perish dept

For the better part of the last decade, some Wall Street analysts have quietly been pointing out that the current pay TV business model is unsustainable. As it stands, broadcasters increasingly impose giant price hikes for the same programming to cable companies, who in turn pass those higher costs on to consumers. Those consumers are, in turn, increasingly "cutting the cord" by moving to cheaper streaming alternatives. And when those streaming alternatives don't provide what they want or raise rates (as AT&T recently did with its DirecTV Now service), subscribers then shift toward free options like over the air antennas or piracy.

Smaller cable providers have been warning for years that unless you enjoy the size and leverage of being a giant ISP and broadcaster combined (AT&T/Time Warner, Comcast/NBC Universal), you're not going to be able to survive this new tight-margin market. Some, like CableONE, have opted to get out of TV entirely and focus on broadband. It's a trend that's only likely to accelerate.

Some Wall Street analysts, like MoffettNathanson analyst Craig Moffett, have been noting for a while that this entire mess isn't getting better anytime soon. He's again making the rounds, arguing that there's a chance that bigger cable operators could similarly embrace the idea of giving up on video as margins tighten. And if they stop caring about video (either by dropping pricey channels or raising rates), it's only going to accelerate the cord cutting trend:

"If larger MSOs follow their smaller peers in concluding that video is no longer worth defending, then subscriber declines would almost certainly accelerate, perhaps radically so," Moffett wrote. "And that, in turn, would force programmers to be even more aggressive in licensing their content to OTT services, sealing the deal. The industry as we know it today could, or would, simply unravel."

This is an industry that responded to increased streaming competition by doubling down on all of its very worst impulses, especially raising rates. As such, a semi-collapse of the sector could probably be a good thing. Most specifically by curing many cable and broadcast executives of the false belief that the traditional, bloated cable bundle is going to live forever, and that cord cutting is just this weird, overhyped trend that stops once Millennials procreate more. A collapse would send a very clear message that heated video competition is the new normal and adaptation is essential.

That said, giant cable operators like Comcast NBC Universal have a secret weapon in this fight: their monopoly over broadband. Moffett has been pointing out for a long time that "video just doesn't matter" anymore if you're a cable TV provider. With tight margins and hot competition in video, all the money is going to be in broadband moving forward:

"That in turn has diminished the value of a pay TV subscriber versus a broadband customer. Moffett estimated that the market values a video customer at a multiple of about 2 times cash flow, while a broadband subscriber is attached a value of between 12 and 13 times cash flow. “Video just doesn’t matter much anymore,” Moffett said."

Moffett doesn't clearly illustrate in his research notes is why broadband is so profitable. It's so profitable because in many areas it remains a natural monopoly dominated by just a few major players like Comcast or Charter (Spectrum). This monopoly control provides a secret weapon in the video wars. Thanks to no competition, these companies can impose arbitrary and unnecessary usage caps and overage fees, which drives up the price of not just broadband...but of using streaming competitors. Companies like AT&T remove these restrictions if you use their own streaming services. In short, they hope to win by dominating the pipe, then tilting the playing field to dominate the content.

Between their attacks on FCC oversight (including net neutrality) and these natural monopolies, many of the bigger companies will be protected for some time from the financial cost of increased video competition. But ultimately the entire market is going to need to be dramatically reshaped as traditional, bloated and expensive cable TV channel bundles die thanks to a little thing called competition. Avoiding the financial hit on the video side of the equation is not going to be avoidable for many of these companies, no matter how hard they tried to convince themselves the cord cutting trend wasn't a serious threat.

While that greater video competition will be a good thing for consumers as a universe of companies battle it out, consumers will ultimately be paying for the evolution courtesy of higher broadband bills and weird net neutrality violations, thanks to a broken US broadband market and regulatory capture problem neither party has historically been interested in trying to fix.

Filed Under: cable, television, wall street

Even Wall Street Is Nervous About Comcast's Latest Bid To Grow Bigger For Bigger's Sake

from the growth-for-growth's-sake dept

Comcast's latest effort to grow even larger is spooking even the company's investors. "Growth for growth's sake" has been the mantra of the telecom and TV sectors for years. Once growth in any particular market (like broadband) saturates, companies begin nosing about for efforts to grow larger in other sectors, even if it it's well outside of their core competencies (see Verizon Sugarstring, Go90). Unfortunately for the end user, such growth isn't accompanied by any meaningful parallel investment in quality product or customer service, a major reason so many users "enjoy" Comcast services today.

At the same time, this growing power results in increased efforts to thwart any effort to rein in this power, leaving oversight of the natural monopolies more precarious than ever (see: net neutrality). That's exceptionally true for Comcast, where the one-two punch of fading state and federal oversight, expiring NBC Universal merger conditions from its last 2011 megadeal, and a growing monopoly over broadband is forging a perfect storm of trouble.

Comcast's latest gambit came over the weekend, when the nation's biggest cable operator toppled 21st Century Fox with a $39 billion for Sky broadcasting, Europe's biggest pay TV operator. But even Wall Street stock jocks, traditionally more than happy to cheerlead mindless growth for growth's sake, have become nervous about the expansion, worrying that Comcast's overseas exploits are little more than a pricey distraction:

"Craig Moffett, an analyst at MoffettNathanson LLC, downgraded Comcast’s stock Monday to neutral, saying the company had “grossly overpaid for Sky.” Timothy Horan, an analyst at Oppenheimer, also downgraded Comcast’s stock, citing the company’s need to invest instead in the U.S., where it faces growing competition from wireless and online TV rivals."

“It’s going to be incredibly hard to justify having paid such a high price,” Moffett said in an interview Sunday. “This is an asset that neither Disney nor Comcast investors wanted to win.”

Comcast stock price took a major tumble as a result. The biggest problem for many investors is debt. Like AT&T's acquisition of Time Warner, the deal saddles Comcast with so much debt it's going to be forced to cut corners on other fronts in order to shore up the losses. Usually, at least in telecom, that results in cuts to customer service. It also results in companies nickel and diming captive customers harder than ever, whether that means usage caps and overage charges, bullshit fees, or even charging users more money if they want to protect their own privacy.

As you might expect, Comcast tried to put a more positive spin on its latest looming acquisition, company CEO Brian Roberts bubbling over about the overseas expansion:

"This is a great day for Comcast. Sky is a wonderful company with a great platform, tremendous brand, and accomplished management team. This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally. We couldn’t be more excited by the opportunities in front of us. We now encourage Sky shareholders to accept our offer, which we look forward to completing before the end of October 2018."

The problem, of course, is the same one Comcast has always faced. Its ragingly incompetent customer service has made it the laughing stock of the tech industry for the better part of the last decade. What Comcast actually needs is to pause, invest in overall quality and support, and focus on its core competencies. But because traditional broadband is never profitable enough, quickly enough for Wall Street, Comcast executive eyeballs are always fixed everywhere other than fixing some of the company's many, fatal flaws.

Filed Under: acquisitions, wall street
Companies: comcast, sky

Wall Street Predicts Apathetic Regulators And Limited Competition Will Let Comcast Double Broadband Prices

from the who-needs-competition-anyway dept

Wall Street predicts that cable giants like Comcast will soon be cashing in on the one-two punch of rubber stamp regulators and an ongoing lack of competition in the broadband space. Under the Obama administration, regulators turned a blind eye to the fact that cable giants like Comcast were taking advantage of a lack of competition to impose arbitrary and unnecessary usage caps and overage fees. Under the Trump administration that apathy has ballooned ten fold, with the looming assault on net neutrality only green lighting Comcast's ability to use those fees to raise rates and hamstring streaming competitors.

Wall Street analysts obviously adore this new paradigm of regulatory apathy to the sector's competition woes, and predict cable providers are about to enter a very lucrative period of profit taking. Said enthusiasm is usually masked by the use of rhetoric that obfuscates the real consumer and market harms such cheer leading assists. For example, a research note sent to investors this week by New Street Research analyst Jonathan Chaplin indicates that competitive "headwinds" will soon waver, allowing Comcast to double the amount it currently charges for broadband:

"We have argued that broadband is underpriced, given that pricing has barely increased over the past decade while broadband utility has exploded,” New Street said. “Our analysis suggested a ‘utility-adjusted’ ARPU target of ~$90. Comcast recently increased standalone broadband to $90 (including modem), paving the way for faster ARPU growth as the mix shifts in favor of broadband-only households. Charter will likely follow, once they are through the integration of Time Warner Cable.”

New Street added that “broadband pricing could double from current levels.”

How exciting. Of course while Chaplin tries to argue that broadband pricing has "barely increased" over the last decade, it's important to understand he's talking about the advertised price. Comcast has provided a master class in the tactic of using hidden, sneaky, and/or entirely bogus fees to covertly jack up the cost of service post sale, something both Comcast and Charter are facing numerous lawsuits for. Then there's Comcast usage caps and overage fees -- which is Comcast's charming way of abusing limited competition to raise rates -- while pretending that isn't actually happening.

That brings us to the other major portion of Chaplin's note, which goes on to predict that Comcast should be fairly well insulated from cord cutting. How? Thanks, in part, to Comcast's growing monopoly over broadband and the higher prices that allows:

"The traditional pay-TV market saw the worst loss of subs on record this quarter,” the investor note said. “We don’t expect this trend to change anytime soon; however, we think cable should be somewhat insulated because: 1) they should take share in a declining market, helped by the pull-through effect from growing share in broadband; 2) we don’t think cable makes much money in pay-TV. In fact, the [free cash flow] lost from subs dropping pay-TV is generally recovered through higher HSD pricing.”

As we've noted previously, Comcast is somewhat insulated from cord cutting because of a lack of competition in the broadband space. In countless markets nationwide, telcos have simply refused to upgrade aging DSL lines at any scale. These telcos have effectively ceded control of the residential broadband market to local cable competitors as they focus on other ventures (largely either expanding further into business broadband or clumsily slinging video ads to Millennials in a quest to be the next Facebook or Google). As a result, we're quietly and slowly seeing bigger cable broadband monopolies than ever in many markets.

As these frustrated DSL users flee to cable just to get current-generation speeds (which is happening faster than ever), they're signing up for broadband and TV bundles that are notably cheaper than TV alone. That doesn't mean these users necessarily wanted cable TV (in many instances the cable box sits dusty in a closet), but they're still paying all the same. Meanwhile, usage caps and overage fees help protect cable TV revenues by making it more expensive than ever to flock to streaming video competitors, and with the looming death of net neutrality, these companies can also exempt their own streaming services while penalizing competitors.

This is, again, something we've built thanks in large part to the bipartisan apathy toward actually doing anything to fix the broadband market. Because actually doing so would upset deep-pocketed campaign contributors, we're apparently content in paying empty lip service to things like "bridging the digital divide," while despised industry giants like Comcast cash in on our collective Congressional and regulatory dysfunction. Enjoy your higher Comcast bill, everyone.

Filed Under: broadband, competition, prices, wall street
Companies: comcast

Wall Street Merger Mania Is Driving Us Toward One Single, Horrible ISP - Probably Named Comcast

from the merge-ALL-the-things dept

Many consumers are still reeling from a Charter, Bright House Networks and Time Warner Cable merger that left users with slower speeds, worse service, and higher prices. Other broadband consumers are still struggling with a bungled Frontier acquisition of Verizon assets that left users with prolonged outages and even worse customer service than the shitshow they already enjoyed. As we've seen for decades, this kind of mindless consolidation traditionally only benefits the companies involved, particularly in a market where real competition is in short supply.

This growth for growth's sake is one of the major reasons Comcast -- and its horrible customer service (which didn't scale with the company's expansion because that would have cost money) -- exists. And Wall Street's relentless thirst for growth at all costs is a major reason these companies can't simply focus on being the best "dumb pipes" possible, instead focusing their attentions on expanding into markets they have little expertise in (see Verizon's ingenious plan to hoover up failed 90s brands and pander to Millennials). When they can't succeed because they're out of their depth, they try to tilt the playing field (killing net neutrality).

There's oodles of history lessons here, and there's every indication we intend to learn nothing from them. With the ink barely dry on Charter's troubled deal, and the Trump administration signaling that no merger is too big or too absurd, Wall Street analysts have been positively giddy this year pondering megamergers in telecom that had previously been unthinkable on anti-competitive or antitrust grounds. That has included heavy pushes for a Sprint acquisition of T-Mobile or a Verizon bid to buy Comcast -- the massive, obvious anti-competitive impact of both deals be damned.

This week, the merger mania du jour apparently involves a plan that would involve Comcast and French-owned Altice working in concert to buy Charter Communications, whose $180 billion asking price has proven too steep for any one company to contemplate alone (Verizon made a $100 billion offer and was rejected). Citigroup has floated the idea that after acquisition, Comcast could integrate the Time Warner Cable customers they were blocked by regulators from acquiring for anti-competitive reasons, leaving us with one giant cable company to rule us all:

"Charter is pretty much an equal rival in size and scope to Comcast at this point, at least with regards to subscriber numbers. Each company has somewhere in the neighborhood of 25 million customers. For the two to merge outright would leave one dominant cable company in the country, with about half of the entire nation’s subscribers — from coast to coast, and in many of the states in between — under a single umbrella."

Granted there's no guarantee such a deal will happen. Wall Street stock jocks often like to float rumors then profit off of the herk and jerk of stock prices caused by the half-truths they themselves create. But should Comcast be able to swing such a deal, we could be looking at a supernova of anti-competitive dysfunction, the likes of which made Comcast's well documented issues seem charming.

Consider that cable's monopoly was already blossoming thanks to the countless telcos which have effectively stopped trying to compete -- in large part because Wall Street thinks spending money to upgrade your networks is a fool's errand. Then ponder the fact that the current FCC is busy gutting any and all meaningful oversight of these companies, allowing them to inevitably engage in all manner of anti-competitive shenanigans, from arbitrary and punitive usage caps, to net neutrality and privacy violations.

This all may sound like hyperbole, but it's a future that's very much under construction. And the folks giddily contemplating the "looming synergies" of such monumental coagulation are building it with absolutely zero concern for the impact on consumers, startups, small businesses or the health of the internet. Telecom sector executives and the folks paid to cheer their every decision have every intention of taking the already dismal Comcast experience, injecting it with steroids, and setting it loose on a market with no organic competitive or regulatory checks and balances. And by the time most notice the negative repercussions, these same folks will already be hyping the next wave of mindless consolidation.

Filed Under: broadband, isp, mergers, wall street
Companies: altice, bright house, charter, comcast, time warner cable

The Nation's Telcos Are Hemorrhaging Customers Because They Refuse To Upgrade Their Networks

from the don't-build-it-and-they-won't-come dept

So we've noted for a while how despite all the hype surrounding next-gen wireless and gigabit fiber builds like Google Fiber, vast swaths of this country are actually facing less broadband competition than ever before. That's in large part thanks to the nation's phone companies, which have effectively given up on upgrading their lagging DSL networks at any real scale. One net result is millions of customers paying an arm and a leg for sub 6 Mbps DSL service that doesn't even technically meet the FCC's new standard 25 Mbps definition of broadband.

And it's not changing anytime soon. Verizon has all but frozen next-gen upgrades as it shifts its focus to gobbling up failed 90s internet brands to help it sling video advertisements at Millennials (poorly, we might add). But smaller telcos like Frontier, CenturyLink and Windstream have similarly been losing broadband customers hand over foot as they flee to faster cable competitors. Even Wall Street, which has historically and myopically disliked putting any money back into broadband networks, has started to take notice, resulting in the nation's telco stocks taking a precipitous dive in recent months:

"Shares in the wireline ILEC/RLEC space (CenturyLink, Frontier, Windstream) have endured the worst three consecutive quarters in industry history, with shares plummeting an average of -20% in 4Q16, -21% in 1Q17, and -24% in 2Q17 (we note another -5% in 3Q17 thus far), mostly from Frontier and Windstream as CenturyLink shares are being supported by the Level 3 acquisition,” Cowen said in a research note."

It has gotten to the point where some Wall Street analysts have even gone so far as to *gasp* recommend that some of these companies actually upgrade their networks if they want to remain relevant. Ironic, since it was Wall Street's relentless focus on short-term gains and avoiding these necessary network upgrades that help put these companies in this position to begin with:

"Jennifer Fritzsche, senior analyst for telecommunications services at Wells Fargo, doesn't think Frontier can actually right said ship without offering consumers a better broadband product.

"It is hard to fix a problem just by cutting costs when your competition (cable) is only pressing its foot heavier on the capex and fiber pedal," Fritzsche said.

But instead of upgrading the networks they already have, many telcos are trying to please Wall Street by focusing on growth for growth's sake. Frontier recently gobbled up Verizon's unwanted DSL customers in California, Texas and Florida in the belief that bigger automatically means better. But Frontier not only saddled itself with massive additional debt and outdated copper landlines Verizon had neglected for years, but it bungled the acquisition so badly it actually forced many of these subscribers to flee to cable even faster. Focusing on growth for growth's sake now has Frontier teetering on the verge of bankruptcy.

But the more problematic impact of all this is that across countless markets, consumers looking for current-generation broadband often only have one option: cable providers. These cable providers are on the cusp of enjoying a greater broadband monopoly than ever before, resulting in less incentive than ever to shore up their historically awful customer service, and only encouraging their slow but steady deployment of arbitrary and unnecessary usage caps. Combine that with the Trump administration's intense focus on eliminating all consumer protections in the telecom space, and it shouldn't take a tea leaf reader to see how this could potentially end very badly for consumers and competitors alike.

Filed Under: broadband, competition, dsl, investment, telcos, wall street
Companies: centurtylink, frontier, verizon, windstream

No, The Wall St. Bull Sculptor Doesn't 'Have A Point'

from the nope dept

Last week, we wrote twice about sculptor Arturo Di Modica and his claim that the "Fearless Girl" statue, that was placed last month in front of his "Charging Bull" statue, violates his rights. As we explained, in detail, he has almost no legal case here. His letter to New York City argues three possible claims of action -- all of which would almost certainly be losers in court (as we detailed in that last post).

However, I still have seen a bunch of people arguing in support of Di Modica, claiming that he "has a point." Many have pointed to a blog post by Greg Fallis that is literally titled "Seriously, the guy has a point." Others have raised other issues in discussions I've seen (and taken part in...) on Twitter and Facebook. I still don't think he has any point at all, but I wanted to do a post addressing each of the key issues I've seen raised, and explaining why I think they fail as legitimate arguments.

Fearless Girl is an ad

I had debated mentioning this in the first post (and only obliquely noted that "there have been some criticisms" of Fearless Girl), but decided it was really meaningless. But people keep bringing it up, so let's address it. Yes, the Fearless Girl statue is an advertisement of sorts. The whole thing was created and financed by State Street, a massive investment firm, with help from McCann, one of the giant ad agencies. And a big part of the criticism is that State Street has a "gender diversity index" whose ticker symbol is SHE, focused on tracking the performance of "companies with the highest levels within their sectors of gender diversity on their boards of directors and in their senior leadership." And Fearless Girl has a plaque that says: "Know the power of women in leadership. SHE makes a difference." Many have, quite reasonably, argued that (especially given the capitalization of SHE) Fearless Girl is just an advertisement.

And the response to that should be... so what? As we've pointed out for many, many years, all content is advertising in some sense. It may be advertising for the artist. It may be advertising some idea. It may be advertising a theme. Di Modica's bull was "advertising" the resiliency of American capitalism. Just because it's advertising doesn't mean it's not artwork. And even advertising can have a positive social message. So, the claim that it's "advertising" doesn't really impact anything here. Yes. It's advertising. So what? It's also still art, and was created by a real artist whose own work and talents are unfairly diminished when you say that it's not art just because someone paid for it and it advertises something else. Or as our own Leigh Beadon points out:

Some are arguing that because there's money involved, that somehow changes things, but I don't see how. After all, the bull itself celebrates money and markets, so if you're suddenly arguing that money is bad, well, then... I'm not sure how that supports the argument that the artist has a point.

It uses the only copy of Charging Bull

This is the argument I've heard most often after the "it's an ad" argument, and I'd argue it's more persuasive, but still not very persuasive. The argument here is that, unlike a remix or standard appropriation art, where the original work remains untouched, the placement of Fearless Girl effectively incorporates Charging Bull such that Charging Bull can no longer be separate from Fearless Girl. If you are to accept the idea that putting another artwork near an original piece of artwork can never be allowed, even in a public place, and even if the latter piece incorporates the original to comment on it... well, you're going to run into a lot of problems pretty quickly. Because then you're arguing two things that are pretty difficult to justify: (1) that an artist should get absolute control over any other works near his or her own artwork, and (2) that artwork is defined by what is around it and so the context can never change.

Both things seem unjustifiable. On the first point, what if, instead of the Fearless Girl statue, someone created a placard (an artistic placard) protesting what they believed was unfair sexism on Wall Street and stood next to the bull? Would that lead to the same outcry that this somehow "diminished" the Bull? Or imagine a world in which an artist could force a museum curator -- or a private collection owner -- to not display some other artist's artwork next to his or her own, because the juxtaposition of the two pieces was deemed by the artist to be unflattering? Most people would think that is crazy. How one puts up a piece of artwork, and what pieces are put around it, are the decisions of those who control the physical pieces and have the rights to display them. Here, Di Modica dumped his bull on the streets of New York, and New York now has possession of the physical statue. It can decide how to display it.

Plenty of museums use the careful placement of different works to create juxtaposition and even direct criticism or commentary. It would be crazy to think that an original artist could bar any of that.

As for the second point, we don't have to look very far to see how silly it is: Di Modica himself placed the bull in the street in front of the NY Stock Exchange, specifically making a point about that particular financial market. He was commenting on the NY Stock Exchange and the fact that it represents a form of capitalism and free markets (whether or not you agree with that is beside the point). And yet, NYC moved Charging Bull around the corner. It is no longer directly in front of the NYSE, but people still get the context and they understand the intent.

I've seen people arguing that if Fearless Girl were removed to somewhere else it wouldn't make the same point, but that's not necessarily true. People are not dumb. They can understand context. And they can see how context changes. The Bull moved from the NYSE to a nearby park, and yet people still recognize that Charging Bull is commenting on the stock market and the Wall St. ethos. Yes, it helped where it was initially placed, but the mythology around the placement has stuck with the Bull. The same is likely true for Fearless Girl. Were it -- or the Bull -- to now move, many people would still remember and recognize the initial juxtaposition, and understand the intent (again, even if it was an ad).

But Fearless Girl changes Charging Bull's meaning

I've seen this from a few people, arguing that the artist must have some right of "control" over the meaning of the statue. But that's just not the way it works. This is a similar argument that we've seen in lots of copyright disputes over the years -- especially cases involving fair use. People seem to ascribe a somewhat mythical concept of "control" or "control of message" that an artist can have over their artwork. But that's never been true. Once a work of art is released to the public, the public interacts with it and interprets it and that's wholly outside the control of the original artist. Sometimes, over time, people's impression of a work of art can change drastically -- from bad to good or from good to bad.

Indeed, that's a big part of art. Art is barely art if there's no reaction to it. The reaction itself is a large part of the art, and that reaction is not dictated by the artist. Sometimes that reaction is just how people see things. Sometimes that reaction is in how it inspires others to create other works. Art is often defined by the reaction to it. And here, if that reaction changed, that's just a part of the nature of art and culture and society and how those things interact. Over the years, for example, there have been debates about the artistic value of works that supported, celebrated or were associated with bigotry. And there have been protests against them. But that's allowed, because people are allowed to react to art how they want, and sometimes their reactions can impact how others see things as well. Some people who grew up with the Confederate flag as a symbol of the south have grown over time to realize the racist connotations it can hold. Should we not allow people to raise those issues and get people to rethink their support of that flag?

Control in art is an illusory concept: people insist it's there, when it really is not. An artist has control over the artwork while they're working on it and before they've released it to the world, but once it's out there, once it's become available to interact with the reactions of the public, control is lost. And that's a good thing. It's that loss of control that makes art art.

You may not like Fearless Girl. You may not like Charging Bull. You may not like capitalism or advertising -- or maybe you do. You may like control. But the simple fact is that none of the arguments that Di Modica and his supporters are making make much sense in the grand scheme of things. The bull can survive Fearless Girl and so can Di Modica.

Filed Under: art, arturo di modica, charging bull, context, control, copyright, fearless girl, moral rights, wall street
Companies: state street