Verizon, AT&T Customers Sue To Reverse T-Mobile Merger, Saying It Raised Everybody’s Prices

Legal Issues

from the merge-ALL-the-things! dept

We just got done noting how pretty much all of the criticism of the Sprint T-Mobile merger by economists and consumer advocates wound up being true. The deal has resulted in more than 10,000+ eliminated jobs, steady price hikes, annoying new fees, a weaker T-Mobile brand, and a lower quality product overall. It also clearly distracted T-Mobile from competent network security.

T-Mobile’s reddit forums are filled with employees saying the disruptive spirit of the company has been dead since the merger. T-Mobile customers are annoyed by endless new restrictions and price hikes.

But Verizon and AT&T customers are also pissed, and are part of a new lawsuit against T-Mobile arguing that the merger raised prices for everybody due to the reduction in overall wireless market competition. A federal judge in Chicago last week ruled that plaintiffs made some decent points and the lawsuit should be allowed to proceed:

“U.S. District Judge Thomas Durkin in a 41-page ruling on Thursday said the plaintiffs “plausibly” argued that higher prices “flowed directly” from the $26 billion merger.”

The important time to protect consumers is before these kinds of competition-eroding deals are approved, but that very clearly didn’t happen here. Trump regulators at the FCC didn’t even bother to read about the deal’s impact before approving it. Trump “antitrust enforcers” at the FTC actively helped T-Mobile avoid regulatory scrutiny on their personal time, you know, like antitrust enforcers do.

T-Mobile’s response to the lawsuit was expected: to deny everything and insist the U.S. wireless sector is secretly super competitive:

Attorneys for T-Mobile called the lawsuit “unprecedented,” and said the plaintiffs’ damages were “speculative.”

“If plaintiffs are unhappy with Verizon and AT&T, there is a remedy available in the highly competitive market that wireless consumers enjoy today — they should switch to T-Mobile, not sue it,” attorneys for T-Mobile told the court.

The harms of mindless consolidation are not theoretical. They’re clearly documented. Yet we’re dedicated to ignoring those harms because such consolidation is hugely profitable for a handful of over-compensated executives and a few key investors (sometimes). Rinse, wash, repeat, with nobody responsible for the end result getting within a thousand miles of introspection or accountability.

I’d not expect much from the suit in terms of reform. Any payout will be a tiny fraction of the financial harm caused. The real fix lies in more stringent merger review and well funded and staffed regulators; concepts defenders of a broken but profitable status quo have no real interest in.

Filed Under: antitrust, antitrust reform, competition, consolidation, high speed internet, mergers, prices, wireless
Companies: t-mobile

HBO CEO Used Fake Twitter Accounts To Troll Critics, Didn’t Realize There Are Professionals Who Can Do That For You

Too Much Free Time

from the great-job-everybody dept

We’ve well established that the AT&T–>Time Warner–> Warner Brothers Discovery mergers were some of the dumbest, most pointless “business” exercises ever conceived, resulting in more than 50,000 layoffs, the death of popular properties like Mad Magazine, and an overall erosion of brands like HBO and CNN.

Very much on brand, HBO’s CEO and chairman Casey Bloys has now been busted for using fake Twitter accounts to troll critics of HBO executives and its programming. The revelation came courtesy of text messages included as part of a wrongful-termination lawsuit filed in Los Angeles Superior Court in July by former HBO staffer Sully Temori.

Temori claims he was wrongfully terminated after disclosing a mental health diagnosis, but also insists he was repeatedly asked by Bloys to create Twitter accounts to attack show critics. It was not a… well coordinated effort. One such account was a fake Texas mom who attacked show critics for being sexist.

Other fake accounts were used to comment on Deadline stories critical of Bloys leadership at HBO:

While HBO has denied every allegation in the lawsuit (including the creation of fake accounts), Bloys has admitted to his shitty judgment and insists he’s learned his lesson:

“As many of you know, I have progressed over the past couple of years to using DMs. Now, when I take issue with something in a review or take issue with something I see, I DM many of you and many of you are gracious enough to engage with me in a back and forth. It’s a probably a much healthier way to go about this.”

The great irony here is that there are countless policy and lobbying shops that specialize in making up fake people to create the illusion of support or opposition to pretty much anything a corporation would possibly want. Such services are certainly affordable for Warner Brothers Discovery executives whose compensation dramatically outpaces their competence.

Such firms are endlessly at work attempting to shape perception or policy with people who don’t actually exist (recall when telecom giants used fake and dead people to attack net neutrality at the FCC?). In the media sector such firms have been caught manipulating Rotten Tomatoes and IMDB scores, or providing fake support to get certain projects off the ground.

Such firms exist so that thin-skinned executives don’t wind up with their shitty judgement under a giant spotlight. But like everything the modern AT&T/TimeWarner/Discovery conglomerate touches, even their effort to spin the narrative wound up being decidedly half assed.

Filed Under: casey bloys, competition, consolidation, disinformation, executives, fake twitter accounts, mergers, pr, spin, sully temori, video
Companies: warner bros. discovery

Everything T-Mobile, Sprint Merger Critics Predicted Has Come True

Failures

from the merge-ALL-the-things! dept

Last week T-Mobile annoyed customers everywhere by not only informing them they’d soon be facing a steep price hike, but by pretending it wasn’t actually a price hike. The company announced it would be moving customers to a more expensive plan unless they opted out (hoping that users wouldn’t notice the change). Leaked support docs show reps were told to lie to customers:

“The leaked documents show what customer service reps are being trained to tell users. Instead of saying the price is going up, reps will say, “We are not raising the price of any of our plans; we are moving you to a newer plan with more benefits at a different cost.” That’s the talking point customer service reps are supposed to use if a customer mentions that they saw commercials “about how T-Mobile won’t raise the price of my plan.”

But users say the new “benefits” suck and aren’t worth the headache. They also said the head fake violates the company’s previous pledges not to raise rates, which was used for years to pull customers to T-Mobile from AT&T and Verizon in the first place.

This is par for the course for the “new” T-Mobile in the wake of the 2020 Sprint merger. Gone are the interesting new promotions. Gone is the amusing ridicule of wireless giants like Verizon and AT&T. Gone is the pseudo-hip trash talking CEO in his magenta sneakers. In its place is a wireless provider that looks more and more like the companies T-Mobile used to ridicule.

Of course, this was all predicted by myself and a long line of deal critics. Not because we’re ornery bastards, but because this is what always happens in the wake of this kind of mindless consolidation. Claiming that this wasn’t going to happen (and there were a lot of industry-funded bullshitters dedicated to pretending this wouldn’t happen) was akin to fighting the laws of physics.

When T-Mobile and Sprint proposed merging back in 2020, historians, economists, and consumer groups weren’t gentle with their criticism. They noted that historically around the world, a reduction in overall wireless competitors from four to three almost always resulted in a bunch of layoffs, less competition, higher prices, and a lower quality product overall.

T-Mobile and former CEO John Legere’s response to those critics? To claim they were lying, and to insist the deal would be endlessly beneficial and “job positive from day one and every day after.”

But it didn’t take long before T-Mobile had not only laid off nearly 10,000 employees (and tried to lie about it), but had begun socking users with the exact kind of dodgy fees and price hikes T-Mobile had previously made fun of. Gone is the disruptive, creative, edgy brand consumers found refreshing, and in its place is more of the broken old status quo.

Trump-era regulators played a key part of the con. They approved the deal without even reading the details about the deal’s impact. They then concocted an elaborate but clearly doomed “fix” involving Dish Network designed to provide flimsy policy cover in the press.

You’d like to think the U.S. would learn from this experience and perhaps start doing some more diligent reviews of mergers and consolidation. But nobody will learn anything from this experience because reputational or financial penalties simply aren’t built into the mathematics.

The Trump era revolving door regulators who approved the deal have failed upward to new positions in industry. John Legere is off napping on a giant pile of money. The companies got massive tax breaks. And consumers and employees were once again left holding the bag after promises of amazing consolidation “synergies” are once again shown to be hollow, performative bullshit. You’d think we’d eventually learn.

Filed Under: 5g, consolidation, mergers, price hikes, prices, telecom, wireless
Companies: sprint, t-mobile

Push To Strip Fox’s Broadcast License Over Election Lies Gains New Momentum

Policy

from the hey-at-least-we're-trying-something dept

Last July, we noted how media reform activists had petitioned the FCC to revoke Fox News’ local broadcast license in Philadelphia. More specifically, the group argued that Fox News’ rampant election fraud propaganda technically violated the “character clause” embedded in the Communications Act the FCC is supposed to use to determine whether an organization should hold a broadcast license.

To be clear, a single Fox broadcast affiliate losing its license to broadcast in Philly wouldn’t have much of an impact on Fox’s ongoing efforts to spew GOP propaganda nationwide.

But, if successful, it might be replicable in other markets. Even if not, it serves a useful function in terms of activism and gaining media exposure for the need for some flavor of regulatory reform (like restoring popular, bipartisan media consolidation limits stripped away by the Trump FCC, media antitrust reform, or having the FCC actually use its authority to ensure economic and racial diversity ownership in media).

I remain unconvinced that the current Rosenworcel FCC has the political backbone to follow through on such a request. But interestingly enough, the FCC last week took the relatively rare step of opening up the petition to broader public comment, something requested by the original petitioners (the all volunteer-run Media and Democracy Project) but unsurprisingly opposed by Fox lawyers:

On July 18, MAD urged the FCC to change the status of the license renewal proceeding to allow more public participation because the issues raised in the petition “go beyond Fox’s day-to-day operation of WTXF-TV” and “address the broader question of whether Fox retains the basic qualifications to remain an FCC licensee.” Other public interest groups want to participate in the proceeding, MAD said.

Fox opposed that request, but the FCC announced that it will make the change in a notice issued yesterday.

MAD’s been doing a pretty good job of forming an alliance of folks backing broader public conversations on this. That includes numerous traditional Conservatives, several FCC staffers, and even numerous one-time Fox employees (like Preston Padden); who all agree that Fox’s obvious propaganda is proving to be violently harmful to democracy, the discourse, and the broader public good:

MAD’s call for an evidentiary hearing on the Fox renewal received additional support in a filing by conservative writer William Kristol, a former Fox News contributor; and Ervin Duggan, a Democrat who was an FCC commissioner in the early 1990s and later became president of PBS. The call for a hearing was also backed by Alfred Sikes, a Republican who was FCC Chairman from August 1989 to January 1993.

There’s obviously some concerns that this precedent could be abused in the future by Republicans to attack local broadcast news outlets critical of the GOP (not that there’s many of those left in the Sinclair Broadcasting era).

But I still doubt this gambit even gets to that point. FCC boss Jessica Rosenworcel generally has proven reluctant to even acknowledge that telecom monopolies exist and are harmful. The idea that she’d actively push to strip away a Fox broadcast license and wade hip deep into a political firestorm seems well out of character for a regulator who’s clearly not keen on meaningfully challenging corporate power.

Still, we may get an interesting hearing out of this mess that puts Fox’s malicious disinformation and the calls for reform on wider public display.

We inhabit an era where the question “what do we do about Fox News propaganda?” sees a real shortage of solutions that are both practical and don’t run afoul of the First Amendment. Everything in the conversation tends to steer toward what’s not possible. Or they involve unworkable gibberish like trying to bring back the Fairness Doctrine (which wouldn’t apply to cable TV anyway).

So I think it’s good that activists are trying something creative and new. I think it’s good to have a broader conversation about what can actually be done about authoritarian and right wing propaganda. I think it’s good to form new, bipartisan coalitions that finally recognize the harm in partisan propaganda masquerading as news. Because our efforts up to this point have consisted of either stoic tut-tutting about what’s not possible under the First Amendment, or half-baked incoherence.

Filed Under: broadcast, consolidation, disinformation, fcc, media, media and democracy project, propaganda
Companies: fox, wtxf-tv

Behold Ongoing Merger ‘Synergies’: T-Mobile Lays Off Another 5,000 Employees

Failures

from the merge-ALL-the-things! dept

Former T-Mobile CEO John Legere repeatedly promised in print that the Sprint merger would result in a massive surge in new jobs. In a rambling missive that took aim at deal critics predicting job losses, the charming, potty-mouthed ex-CEO proclaimed that critics were lying, and that the deal would be “job positive from day one” and every day thereafter.

Of course, that’s not how telecom industry consolidation actually works.

Within just a few years Sprint had already laid off around 9,500 employees at Sprint and T-Mobile. And now the company has announced that it’s laying off another 5,000 employees. As is routine for industry-cozy business news outlets like CNBC, the merger isn’t even mentioned in stories announcing the news. Instead, the layoffs are blamed on “adding more subscribers in a competitive market”:

“T-Mobile US said on Thursday it would reduce its workforce by about 7% by cutting 5,000 jobs in the United States as the wireless carrier grapples with rising costs related to adding more subscribers in a competitive market.”

CNBC is happy to help T-Mobile pretend that the layoffs are necessary due to the inflation bogeyman. In reality, these layoffs were an inevitable streamlining of redundancies caused by industry consolidation. For those playing along at home, that’s nearly 15,000 layoffs since Legere proclaimed the deal would be “job positive on day one and every day thereafter.”

Legere’s 2019 post still sits there like a turd on the T-Mobile website, showing you precisely how worried T-Mobile is about being held accountable for having lied to the press, public, and regulators.

Telecom experts, academics, and consumer groups like the EFF warned repeatedly that reducing the number of major competitors in wireless from four to three would result in higher prices and layoffs. They weren’t just playing predictive patty cake: in nearly every country where regulators approved such a deal, they observed that layoffs and price hikes were always quick to follow.

I’ve covered the telecom sector for twenty-plus years, and mindless consolidation and such megadeals always result in a less competitive market, higher prices, layoffs, and eventually a lower quality product. It’s simply not debatable, however much the industry and its various proxies like to pretend otherwise. As I wrote at The Verge in 2019 T-Mobile’s promises on this front were utterly meaningless.

In addition to the layoffs, the lion’s share of T-Mobile’s aggressive, consumer-friendly posturing has largely disappeared. The company’s “uncarrier” events have grown increasingly boring to the point where nobody much notices when they do or don’t occur. At the same time, T-Mobile has largely stopped competing seriously on price, also precisely as deal critics predicted.

You could also argue the merger distracted T-Mobile from more important things like securing its network, given the company has been hacked and seen consumer data compromised more than eight times in just the last five years.

If you recall, the Trump era “fix” for this reduced competition (in reality a hollow ploy to justify consolidation) was to try and cobble together a replacement fourth wireless carrier out of Dish Network. I also predicted that deal would be doomed, and my batting average is looking pretty good.

Mindless consolidation, “growth for growth’s sake,” and pointless megamergers may thrill short term Wall Street investors and overpaid executives, but are profoundly harmful. But instead of addressing that harm head on, press coverage (again, see: CNBC, CNN) often completely ignores the role of consolidation entirely, ensuring we learn nothing from experience as deal backers perpetually avoid accountability.

Filed Under: 5g, competition, consolidation, high speed internet, jobs, john legere, layoffs, mergers, synergies, wireless
Companies: sprint, t-mobile

‘Max’ Loses Millions Of Streaming Subs After Ongoing Merger Incompetence Bonanza

Failures

from the endlessly-fail-upwards dept

We’ve documented in detail how the series of mergers (AT&T—>Time Warner—>Discovery) that created the Warner Brothers Discovery entertainment empire may just be one of the most destructive, pointless, and incompetently managed “business” transactions in modern media history.

Since its beginning in 2016, the absurd saga has generated hundreds of billions in debt, saw more than 50,000 people lose their jobs, killed or sidelined numerous popular brands (like Mad Magazine and HBO), created oceans of animosity among creatives (pissed at a company that can spend billions on merger debt and bad ideas yet somehow can’t pay residuals or creatives), somehow made CNN an even bigger joke than it already was, and birthed a new “Max” streaming service that’s arguably shittier and dumber than when the whole thing started.

And not surprisingly, the customers aren’t sticking around:

Warner Bros. Discovery (WBD) reported an increased drop in subscribers since it rebranded its streaming service to Max earlier this year, the company said in its quarterly report on Thursday. The company lost 1.8 million subscribers in its second quarter, bringing it down to a total of 95.8 million subscribers from 97.6 million reported in Q1.

Most of these wildly overcompensated fail upward executives were fueled by a “growth for growth’s sake” mindset, pursuing pointless consolidation not to build better products or even gain leverage over competitors — but to nab tax breaks, obfuscate company finances in elaborate financial transactions, see some short term gains, and get “savvy dealmaker” on their resumes.

Of course, when it’s time to affix blame for what went wrong, the excuse is obviously always going to be something other than overpaid executive incompetence and mismanagement (inflation was the latest bogeyman). Or they’ll just deny that reality exists, such as with this bit of corporate gibberish from Warner Brothers Discovery CEO David Zaslav:

“The migration to Max has gone exceedingly well with the overwhelming majority of subscribers in the US successfully transferred,” WBD CEO David Zaslav said during the earnings call. “While we have seen some expected subscriber disruption, we have experienced lower-than-expected churn throughout this process.”

You simply have to spend thirty seconds perusing the HBO Max streaming app to notice that the overall product quality isn’t what it used to be. Less emphasized are HBO’s longstanding quality programs, and everywhere you look there’s an endless array of cheap reality television programs featuring some combination of the dumbest people imaginable trying to have sex on a remote island.

It’s amusing that even this obvious effort to cater to the lowest denominator couldn’t save what ails this new media colossus. The name of the game for Warner Brothers Discovery now is to pay down an ocean of debt (that wouldn’t exist if these deals had never happened), which apparently “requires” skimping on paying writers, and selling or leasing anything that isn’t nailed down, regardless of whether such actions hurt the brand or the company’s long-term chance at success. All while it navigates an increasingly competitive streaming market and the death of traditional cable television.

When most press outlets (themselves owned by giant, unnecessarily consolidated conglomerates) cover this story, the idea that mindless consolidation is harmful (or that the execs in charge of these companies are bumbling, overpaid, self-serving incompetents) rarely warrants a mention (you saw what happened at GQ when one freelancer lightly criticized Zaslav). The inevitable layoffs and dysfunction created by mergers are portrayed as a sort of unavoidable cold calculus in a quest for scale.

Because the bumbling execs that create these consolidated disasters personally make a killing even if it harms the brand, consumers, and employees, there’s zero financial incentive for introspection. And because these same ultra-wealthy incompetents also own most major press outlets, press coverage of what actually went wrong is usually a feckless, incomplete mess. As a result, we repeat the same cycle over and over again, with nobody learning anything from history or experience.

Filed Under: cable, cnn, competition, consolidation, david zaslav, executive compensation, max, media, streaming, tv, video
Companies: warner brothers discovery

Dish, EchoStar Confirm Plans For Completely Pointless Merger

Deals

from the merge-ALL-the-things! dept

We just got done noting how Dish Network’s long-hyped 5G wireless network is likely doomed. While they’re technically building a “wireless network,” the network’s coverage, phone selection, and overall quality has proven laughable so far, and there have been growing worries that Dish is running out of cash as it tries to meet regulatory deadlines for 5G deployment.

Hoping to distract the press and regulators from growing concerns about bankruptcy, Dish last month leaked word that they were considering a merger with satellite provider EchoStar (spun out from Dish back in 2008). They’ve now confirmed the planned deal, claiming it will provide Dish with the “financial flexibility” to finish the company’s attempted pivot from satellite TV to wireless and streaming:

“The merger is meant to provide more financial flexibility for Dish as it seeks to become a major competitor in the wireless service business, the co-founder and chairman of both companies, Charlie Ergen, told The Wall Street Journal. After the merger, EchoStar CEO Hamid Akhavan will serve as president and CEO, while Dish CEO Erik Carlson will make his exit.”

But in a letter to investors, telecom analysts at MoffettNathanson noted that EchoStar’s finances will only be a “drop in the bucket” when it comes to fixing the money problems at Dish:

“Dish’s free cash flow, even with slower capital spending, is now firmly in negative territory. The once-core satellite TV business is imploding. The once-savior Sling TV is shrinking. The springboard-to-wireless Boost pre-paid business is unraveling. The transition-to-post-paid Boost Infinite is years delayed and nowhere to be seen. Consolidated EBITDA cratered by more than 40% YoY.”

You might recall the Dish network was the Trump-era “fix” for the competitive erosion caused by the Sprint and T-Mobile merger. We noted back in 2019 that the whole thing was a doomed mess custom built by Trump-era “antitrust enforcers” as a flimsy way to justify additional industry consolidation. The effort was quickly plagued by delays and infighting between Dish and T-Mobile.

Now, notice how the fix for the mess created by consolidation is, once again, telecom and media industry consolidation.

Under the Trump-era FCC/DOJ deal, Dish was required to deliver 5G service to 70 percent of the population by this year. A mandate it technically met, even though the resulting service has generally been laughed at. But things get much more difficult for Dish now, as it’s obligated to reach 75 percent of the country by 2025. That’s going to require a much more expensive push into suburban and rural markets.

But Dish continues to lose not just traditional satellite customers, but the streaming (SlingTV) and wireless customers its pivot was meant to attract. Duct-taping a satellite TV provider to the side of this mess might buy Dish CEO Charlie Ergen a small additional runway, but it’s still not particularly clear Dish can actually become a popular wireless competitor that consumers actually want to use.

I still suspect this all ends with Ergen selling his vast troves of spectrum holdings and half-completed network to somebody like Verizon, and the FCC doling out a tiny wrist slap (if that) for Dish missing later-stage deployment obligations. And the Trump-era regulators and high-level executives that birthed this shaky plan will, as always, just pretend the whole thing never happened.

Filed Under: 5g, competition, consolidation, fcc, satellite, telecom, wireless
Companies: dish, echostar

Dish Tries To Distract Everyone From Doomed 5G Network By Proposing Pointless Merger With Echostar

Failures

from the hey,-look-behind-you! dept

We just got done noting how Dish Network’s long-hyped 5G wireless network is likely doomed. While they’re technically building a “wireless network,” the network’s coverage, phone selection, and overall quality has proven laughable so far, and there have been growing worries that Dish is running out of cash.

Hoping to distract the press and regulators from this fact, Dish last week leaked word that they were considering a merger with satellite provider Echostar (spun out from Dish back in 2008).

Like so many U.S. megadeals the merger is a pointless one. Dish Network is saddled with debt, on the regulatory hook for a 5G network they’ll probably never finish, and is consistently bleeding not only traditional satellite TV subscribers, but the streaming video and wireless users its pivot was supposed to have been luring in by the bucketful.

Duct-taping Echostar to the side of this mess would be a giant distraction, likely result in pointless layoffs, and, outside of the stock bump and tax breaks, serves no technical function. And it generally smells like a desperation move from Dish CEO Charlie Ergen, who has a general reputation as an annoyingly and sometimes pointlessly stubborn negotiator and a bit of a cheapskate:

Ergen is as cautious and calculating in dealmaking as he was during his days as a professional gambler, when he was kicked out of a Lake Tahoe casino for counting cards. The sticky governance issues mean he would have to pay top dollar to get EchoStar, and he’s not known for that.

You might recall the Dish network was the Trump-era “fix” for the competitive erosion caused by the Sprint and T-Mobile merger. We noted back in 2019 that the whole thing was a doomed mess custom built by Trump-era “antitrust enforcers” as a flimsy way to justify additional industry consolidation.

Now the check’s coming due. While Dish has technically met the FCC’s obligation to craft a wireless network reaching 70% of the population (concentrated in a handful of major cities), the network reach, quality, and phone selection has generally been laughed at in terms of Dish being a valid player in the wireless space.

And it gets harder for Dish now. The next FCC-set benchmark is to reach 75 percent of the U.S. population by 2025, but that involves pushing into a lot more higher deployment cost rural and suburban markets. That’s hard to do when you’re running out of money and nobody takes your wireless play seriously (outside of a handful of telecom trade magazines whose ads and event funding rely on a cozy relationship with industry).

I still suspect this all ends with Ergen selling his vast troves of spectrum holdings and half-completed network to somebody like Verizon, and the FCC doling out a tiny wrist slap (if that) for Dish missing deployment obligations. And the Trump-era regulators that birthed this turd of a plan pretending the whole thing never happened.

The collapse will result in a bunch of layoffs and consumer annoyance. But everybody high up in the chain will have gotten what they wanted, ensuring nobody learns anything. Ergen gets a big load of cash from spectrum holdings that appreciated as feckless U.S. regulators were strung along for years. AT&T, Verizon, and Sprint see less competition. And Trump-era officials got the pointless consolidation they craved.

Filed Under: 5g, consolidation, fcc, megamergers, merger, regulators, telecom, trump, wireless
Companies: dish, echostar

Dish Network (And Its New 5G Network) Is Probably Doomed

Failures

from the this-was-all-painfully-obvious dept

Satellite TV provider Dish Network isn’t having much fun. Despite oodles of direct government assistance during the Trump era, the company’s attempt to pivot from mediocre satellite TV provider to modern streaming TV and 5G wireless giant has been a consistent dumpster fire.

Both the company’s dying satellite TV service and its streaming TV platform (SlingTV) have been bleeding customers, and Dish’s supposed 5G network, the byproduct of a doomed Trump era effort to “fix” the competitive problems caused by the Sprint/T-Mobile merger, looks to be a hot mess. And that was before the company was recently hacked, knocking systems offline for weeks.

We predicted this would go poorly back in 2019. Dish had no experience in wireless, CEO Charlie Ergen is notoriously difficult to get along with, and the remaining three wireless carriers would likely work hard behind the scenes to ensure Dish never became a viable competitor. And as expected, Dish’s early 5G launch was laughable in terms of network reach and phone availability.

And while the telecom trade press has been happy to play along with the idea that Dish has the competency and funds to build a nationwide 5G network, the better part of five years later the industry and the press are finally starting to realize that Dish is probably doomed:

Dish Network appears increasingly desperate to sell assets and raise money — and continues to battle speculation from insiders that it could face bankruptcy, On The Money has learned…The struggling satellite-TV giant is expected to meet its commitment to cover 70% of the US with a 5G wireless network by the end of the month, but sources are growing increasingly skeptical that Dish will have money to finish its buildout.

By a network that “covers” 70% of the US, they mean a network that can technically reach 70 percent of the U.S. population, which is (as you probably know) mostly huddled around cities. There’s no requirement that this network actually work well, be affordable, or provide modern handsets. And it certainly won’t work if Dish goes bankrupt.

Dish’s next hurdle involves a 2025 deadline to push that number up to 75 percent. But that additional five percent involves starting to extend the wireless network into the kind of rural markets wireless carriers historically don’t find worth it due to high cost. I’d wager that Dish fails completely before 2025. At which point the FCC (especially if under Republican leadership) will dole out a wrist slap, if they punish Dish at all.

It always seemed to me that Dish’s pivot to wireless was a desperate retirement ploy for Charlie Ergen.

While I do think Ergen was hopeful a long shot pivot to wireless would work, the more likely plan B involved letting the company’s massive and hugely valuable spectrum assets appreciate, half assing a 5G network, stringing historically feckless FCC regulators along for a few years, then selling the whole thing to somebody like Verizon on their way out the door. That latter outcome always seemed more likely.

Trump-era “antitrust enforcers” desperately needed something to justify consolidation in wireless, and Dish Network’s plan arrived just at the right time in 2019. So FCC officials didn’t even bother reading about the Sprint T-Mobile merger impact before approving it. And Trump DOJ “antitrust enforcer” Makan Delrahim worked in his personal time to make sure Dish got what it wanted.

The end result will be more consolidation and less competition, precisely what most of these folks envisioned all along. As usual, the losers will be consumers and the thousands of employees who lost their jobs along the way, and the regulators who greenlit this doomed turd of a plan will move on to some other bad idea, perfectly content to pretend none of this ever happened.

Filed Under: 5g, bankruptcy, competition, consolidation, fcc, mergers, spectrum, telecom, wireless
Companies: dish

Disney Gets A Nice Fat Tax Break For Making Its Streaming Catalog Worse

Wall Street

from the streaming-enshittification dept

We just got done discussing how, as the streaming video space consolidates and grows, it’s starting to behave more and more like the unpopular, consolidated cable and broadcast companies they once disrupted. Cory Doctorow’s theory of enshittification has come to streaming, in a big way.

Netflix now thinks password sharing is the devil. Streaming catalogs are shrinking because hugely profitable companies are increasingly too cheap to pay residuals. Writers are striking because executives making billions of dollars don’t want to pay creatives a basic living wage. Prices and restrictions are increasing at the same time the quality of the streaming service you’re paying for deteriorates.

Mindless mergers and consolidation, and Wall Street’s inevitable need for improved quarterly returns at any cost (even if it profoundly harms long term company and brand health) are taking a sector that was just hitting its stride competitively and innovatively, and turning it inside out. All overseen by upward-failing execs who seem to have no idea what they’re doing (looking at you Time Warner Discovery).

We’ve noted repeatedly how these companies keep pulling shows from their lineups in a bid to save money. Often because they’re just too cheap to pay residuals. Following on the heels of HBO Max, last week, Disney+ pulled more than 100 titles from its lineup, including some (like Willow) it had only just produced. Why? Because it netted them a giant tax break:

According to an SEC filing from late Friday, Disney’s set to write off about $1.5 billion following this streaming purge. It was previously known this was a way for Disney to cut costs, and the filing notes that this will be reflected in the company’s fiscal third quarter. But if you thought this would be a one-and-done affair, that is not the case. Towards the end of the filing, the SEC wrote that Disney is “continuing its review and currently anticipates additional produced content will be removed.” Those removals equate to an additional estimated $400 million. But as far as when these removals may happen (or what canceled shows may be caught in the crossfire), that isn’t touched on in the filing, and Disney hasn’t yet said.

Users were given a week’s notice that this content would be disappearing. Media bean counters, myopically fixated on “growth for growth’s sake,” have begun the enshitification process of making you pay more money for an increasingly worse product. Even if that means harming the company’s long term success, brands, and employee and customer relationships.

Lost in the conversation is the fact that these companies burned through hundreds of billions of dollars on completely pointless megamergers that were supposed to deliver untold synergies, broad resiliency, and untold consumer benefits. These same companies also spent billions more on bloated executive compensation packages, or luxury resorts nobody could afford.

That these companies would have saved untold billions (far more money that it costs to host Willow on a server) by avoiding bloated executive compensation packages, leadership incompetence, or completely pointless mergers (see the $200 billion AT&T set on fire for its disastrous Time Warner and DirecTV deals) is curiously either footnoted or not mentioned at all in the broader conversation.

The MBAs who defend these kinds of decisions as cold calculus, are incapable of stepping back and acknowledging that the entire process of mindless consolidation and enshittification is violent, unpopular, senseless, often completely purposeless, results in untold layoffs and ill will, and actually harms these companies longer term. Because, and this is the gist, the stupidity benefits them personally.

Filed Under: consolidation, max, mergers, missing titles, streaming, video, willow
Companies: disney