Schneiderman

New York’s Attorney General Eric Schneiderman resigned late Monday after four women accused him of physical abuse, causing a political earthquake in Albany and potentially stalling several important telecommunications-related cases that were championed by the Democrat.

The New Yorker magazine published an article late Monday with the accounts of the four women who said Schneiderman subjected them to non-consensual physical violence during romantic encounters.

Schneiderman issued several statements denying he assaulted anyone or took part in non-consensual sex. His resignation announcement said the allegations will effectively prevent him from carrying out his office’s work.

He had been a vocal proponent of the #MeToo movement against sexual assault and harassment, including filing a lawsuit against Harvey Weinstein, one of the many high-profile men in politics, entertainment and business accused of assaulting women.

Schneiderman was also one of the country’s strongest advocates of holding telecom companies to their agreements. He was actively involved in pursuing the state’s dominant cable company, Charter Communications, for allegedly selling internet speeds his office claimed the company knew it could not deliver, and was more recently investigating Charter for its failure to adequately expand its rural service area to comply with the 2016 merger agreement between Charter, Time Warner Cable and the state’s Public Service Commission.

Schneiderman was elected in 2010 on a platform of pursuing equal justice for all New Yorkers. His website noted, “As the highest ranking law enforcement officer for the State, Schneiderman believes there has to be one set of rules for everyone, no matter how rich or powerful.”

On Tuesday, the governor announced New York Solicitor Barbara Underwood, also a Democrat, has stepped in to serve as acting attorney general.

Underwood, 73, has been the state Solicitor General since 2007 when she was appointed by then Attorney General Andrew Cuomo. Schneiderman left her in place after he won election to the attorney general position in 2010. Underwood has no record of being a political advocate and has no intention to run for the position in the fall elections, making her largely a caretaker of the office. Her role has traditionally been to represent the state in appeals cases.

Underwood

Her lack of political intention was cited by Gov. Cuomo in his remarks introducing her as Schneiderman’s replacement.

Traditionally, caretaker heads of the Attorney General’s office continue existing cases and rely heavily on staff attorneys and their supervisors to continue litigation. But few observers expect Underwood will break ground on new cases or attempt to shift priorities in the office. Because the next scheduled election for New York’s attorney general is this year, most anticipate Underwood will keep a low profile until the election or the legislature replaces her. Had the governor appointed an acting attorney general with political ambitions, most would have expected an active summer and fall of high profile cases to build a list of accomplishments to promote in the fall campaign.

The last Republican to hold the position, Dennis Vacco (1995-1998), told the press the sudden opening of the office could spark considerable interest among Democrats and Republicans. The Attorney General slot has recently proved to be an important position for anyone considering a run for governor in New York. Both Eliot Spitzer and Andrew Cuomo served in this position before being elected to the governor’s office.

Vacco told the Rochester Democrat & Chronicle he expects few changes in the office if Underwood remains a caretaker until the next election.

James

“If she is not a candidate for election, I think that she will be much more status quo-oriented,” he said.

But if the state legislature moves to appoint an interim replacement, the individual chosen will very likely have a political interest in winning the office at the next election opportunity. Vacco said that individual may want to put her or his own imprimatur on the office operations, which means the cases pursued in the future will not likely be the same as those chased by Schneiderman. The idea is “put[ting] distance between yourself and Schneiderman.”

There are multiple Democrats actively considering or who have been mentioned as possible candidates for the position this week:

NY City Public Advocate Letitia James: Favored by Gov. Cuomo, according to a report in the Wall Street Journal, James is no pushover for cable companies. James has led the charge against Charter Communications’ performance in Manhattan and has held Verizon’s feet to the fire over their slow deployment of FiOS in New York’s largest city.

Former Manhattan U.S. attorney Preet Bharara: Has the support of several prominent admirers in New York and Washington, D.C. His indefatigable prosecution of public corruption cases has him feared in some circles and admired in others. He is also a fierce critic of the president. Consumer groups are uncertain what types of cases would get his attention if he were to win the position.

Rep. Kathleen Rice, the former Nassau County district attorney is actively mentioned as a candidate, as is Queens state Sen. Michael Gianaris, and former gubernatorial candidate Zephyr Teachout. Teachout has been actively involved in promoting broadband issues including net neutrality. Another person who has been approached by Democratic officials to weigh a possible run is Ben Lawsky, the former superintendent of the state Department of Financial Services and a former federal prosecutor in the Manhattan U.S. attorney’s office.

Among members of the state legislature, who could quickly appoint a replacement until the fall election, James appears to be the current leading candidate. James would be New York’s first African-American attorney general, and would represent another instance of a female replacing a disgraced male official. She declined comment about her interest in the position.

On the Republican side, lawyer Manny Alicandro is running for the nomination for attorney general. His candidacy is likely to be challenging, given the Democratic enrollment advantage in New York and a mid-term election likely to drive more Democrats to the polls.

A utility pole with Charter Communications wiring in upstate New York.

Charter Communications has been caught counting upstate New York homes and businesses as newly served when, in fact, many have had cable service for years.

New York’s largest cable operator is once again under fire over questions about whether it is misled state officials in its claims to be expanding rural broadband service to 145,000 unserved homes and businesses. In many instances, New York regulators found evidence the company was counting residents as “newly passed” by Spectrum cable lines when regulator on-site audits found those customers were already served by Spectrum or another broadband provider.

The Buffalo News reports staff members of the New York Public Service Commission visited multiple properties and took photos and notes finding simple overhead cable replacements or non-existent addresses were counted by Charter as new expansion areas to be counted towards its agreement to expand rural broadband in return for approval of its 2016 acquisition of Time Warner Cable.

The PSC has already repeatedly admonished Charter Communications for failing to keep to its broadband expansion agreements. The regulator has also warned the company faced at least $1 million in fines and franchise revocation proceedings in parts of New York City for allegedly miscounting 12,467 addresses in dense urban areas of New York City that either already had access to Spectrum cable service or should have under New York City’s franchise agreement.

Based on the latest list of invalid addresses rejected by the PSC, thousands are located in rural upstate New York. Charter is the biggest cable operator in every part of New York State except Long Island, and a few New York City boroughs where Altice’s Cablevision is the dominant provider. Some parts of rural New York are served by independent cable operators or co-ops, and 1,726 addresses Charter listed as “newly passed” were declared invalid after the PSC discovered they were already served by Charter/Spectrum or another provider. The agreement required Charter not to count areas where New York State paid taxpayer dollars to subsidize rural broadband expansion from other providers like telephone companies.

If Charter is unable to provide evidence refuting the PSC’s findings by May 9, 2018, the PSC will fine Charter $1 million. The company was required to maintain a $12 million line of credit after its earlier lapses that can be drawn upon by New York State to efficiently collect fines and penalties.

Stop the Cap! filed a recommendation with the PSC in April that it impose new sanctions against Charter if it is once again found deficient in meeting its commitments. Specifically, the group recommended the PSC impose a requirement that Charter further expand its network to reach as many New York homes and businesses reasonably within reach that have recently been assigned to receive satellite internet access. More than 70,000 rural New Yorkers were disappointed to learn they would not receive promised broadband service from a wired broadband provider because no companies bid to serve these potential customers.

“Compelling Charter to broaden its reach by as few as three miles beyond where it stands today could bring a number of upstate New York residents their only practical chance of getting true broadband service,” said Phillip Dampier, Stop the Cap!’s founder and president. “Fines punish bad behavior but don’t bring anyone broadband service. We’d prefer they be required to spend that money and more on helping erase New York’s urban-rural digital divide once and for all. Satellite internet is an unacceptable solution for all but a small number of these broadband-stranded New Yorkers.”

Cuomo

New York Governor Andrew Cuomo chimed in on Wednesday through his press secretary, criticizing Charter’s alleged bad behavior.

“The State approved Spectrum’s acquisition and its ability to operate in New York based on the fulfillment of certain obligations, including providing broadband access to underserved parts of the state and preserving a qualified workforce,” said Dani Lever, press secretary to Gov. Andrew M. Cuomo. “The governor believes it is essential that corporations doing business with the state uphold their commitments, and we will not tolerate abusive corporate practices or a failure to deliver service to the people. Large and powerful companies will be held to the same standard as all other businesses in New York. The Spectrum franchise is not a matter of right, but is a license with legal obligations and if those are not fulfilled, that license should be revoked.”

In response, Charter strongly denies the allegations and claims it not only isn’t guilty of overcounting new rural passings, it is actually delivering rural broadband expansion ahead of schedule.

“Charter is bringing more broadband to more people across New York state,” the company said in a statement. “We exceeded our last build-out commitment by thousands of homes and businesses.  We’ve also raised our speeds to deliver faster broadband statewide. We are in full compliance with our merger order and the New York City franchise.”

The original 2016 merger approval agreement called on Charter to expand its Spectrum cable service (formerly known as Time Warner Cable) to an additional 145,000 New York locations over four years. Charter’s standing with the PSC was quickly called into question when the company broke its commitment to reach the first 36,250 properties no later than May, 2017.

“It should have been clear to Charter its buildout schedule and commitment was in serious trouble by Thanksgiving of 2016 — just months after completing its $56 billion buyout of Time Warner Cable, when it reported it had achieved only 7,265 new service passings so far,” said Dampier. “By the deadline, Charter only managed to reach 15,164 newly served properties, less than half what it promised. Now the company claims it is overachieving its commitments, but is it fudging the numbers?”

John Rhodes, chairman of the PSC, seems to think so.

When the department’s staff went out on road trips to audit some of Charter’s claimed “new passings,” it discovered troubling evidence that “many of these claimed newly completed passings actually consisted of cable and equipment upgrades to existing cable plant. In other words, Charter replaced older cabling and equipment on a pole with newer cabling and equipment, but the location had already been passed by the cable network, oftentimes having been originally passed with cable [service] for years,” according to Rhodes.

The PSC did not surprise Charter with the results of its audits at the last minute either. New York’s PSC notified it had started actively auditing Charter’s claimed passings as early as January, 2017. Each month, staff members sent the results of those audits to Charter, showing exactly what properties appeared not to be in compliance with the approval agreement.

Rhodes

The audit was comprehensive, according to Rhodes:

DPS Staff’s audit process involved field inspections of targeted address locations identified by Charter as completed. Department Staff used GPS and other mapping tools to identify addresses, cross roads, and landmarks in the periphery of the target inspection addresses. When an address was positively identified, DPS Staff made observations at the claimed completed location to determine if cable network (either aerial or underground) was present, and if so, was the cable newer or older vintage, and whether or not cable was already present and passing the location prior to January 2016. Amongst other things, Field Inspectors made visual observations of cabling, electronics, power supplies, connectors, cable shrink tubing and related attachments for overall condition, including signs of wear, corrosion, and discoloration that would associate weathering and age of the outside plant facilities. Department Staff also looked for noticeable recent additions of cable tags, subscriber drops, as well as the attachment conditions of other pole attachers to help determine if there had been any recent physical moves or changes to the facilities. Further, DPS Staff made visual observations of the foliage and vegetation in the periphery of the communications space, looking for signs of recent trimming or other activity that might indicate outside plant work activity.

The final straw may have been Charter’s December, 2017 buildout list, which included 42,889 claimed new passings. PSC staffers audited 6,389 addresses in upstate New York, revealing disturbingly low verified compliance with the expansion agreement. Of those upstate addresses, Rhodes’ report claims 465 audits were unverifiable or undetermined, 1,726 were recommended for disqualification because there was pre-existing cable service at those locations, and another 1,597 addresses were apparently duplicates from previous quarterly Charter buildout lists the company may have attempted to count twice.

Charter’s most recent settlement agreement set a schedule for rural broadband expansion, with deadlines, benchmarks, and substantial fines for missing either:

• 36,771 properties by Dec. 16, 2017;
• 58,417 by May 18, 2018;
• 80,063 by Dec. 16, 2018;
• 101,708 by May 18, 2019;
• 123,354 by Nov. 16, 2019;
• 145,000 by May 18, 2020.

O’Rielly

FCC Commissioner Mike O’Rielly violated the Hatch Act while speaking at the American Conservative Union’s Conservative Political Action Conference in February, when he appealed to the audience to reelect President Donald Trump to a second term of office, ruled the U.S. Office of Special Counsel.

“Commissioner O’Rielly advocated for the reelection of President Trump in his official capacity as FCC Commissioner,” wrote Erica S. Hamrick, deputy chief of the Hatch Act Unit, in a warning letter. “Therefore, he violated the Hatch Act’s prohibition against using his official authority or influence to affect an election. Although OSC has decided to issue a warning letter in this instance, OSC has advised Commissioner O’Rielly that if in the future he engages in prohibited political activity while employed in a position covered by the Hatch Act, we will consider such activity to be a willful and knowing violation of the law, which could result in further action pursuant to 5 U.S.C. § 1215.”

The Hatch Act was passed to stop partisan political activities of federal executive branch employees. Only the Vice-President and President are exempt. Partisan political activity or interfering or involving oneself in political activity while serving in an official capacity or authority is not appropriate. O’Rielly was found culpable because he appeared at the CPAC event as a FCC Commissioner, not a private citizen.

At one point during a panel discussion entitled, “To Infinity and Beyond: How the FCC is Paving the Way for Innovation,” O’Rielly was asked about the stark policy differences at the FCC between the Obama Administration and the Trump Administration. FCC Chairman Ajit Pai had established a busy agenda at the time, primarily revoking Obama era policies and rules. The panel’s moderator wanted to know “what can we do to avoid this regulatory ping-pong every time there is a new election.”

It was O’Rielly’s response that violated federal law:

“I think what we can do is make sure as conservatives that we elect good people to both the House, the Senate, and make sure that President Trump gets reelected. But there’s another thing you can do. We’re going to have a fight over the Obama internet rules in the next couple months in the U.S. Senate. And that’s going to matter and that vote matters, and so making sure people take the right course on that really does affect what policies we’re able to keep in place moving forward. So we can certainly use everyone’s help along those lines.”

O’Rielly defended his actions before the OSC, claiming he was not advocating for President Trump’s reelection but instead simply answering the question asked, which he thought to be on the topic of net neutrality and how to prevent a new administration from restoring Obama-era policies.

“But Commissioner O’Rielly did in fact have an answer to the moderator’s question that was not partisan – legislative action by the Senate – which he expressed only after suggesting the solution was to ‘make sure President Trump gets reelected,'” Hamrick wrote.

“I appreciate that OSC recognized that the statement in question was part of an off-the-cuff, unrehearsed response to an impromptu question, and that they found this resolution to be the appropriate consequence,” O’Rielly said in response to Hamrick’s ruling. “While I am disappointed and disagree that my offhand remark was determined to be a violation, I take their warning letter seriously.”

Despite rosy predictions from Sprint and T-Mobile executives that the two companies joining forces will result in plentiful competition, lower prices, and more advanced service, the results of prior mergers in the wireless industry over the last 20 years delivered increasing prices, reduced innovation, and a lower customer service experience instead.

Few markets show the stark results of consolidation more than the telecom industry. Monopoly cable rates, barely competitive wireless domination by AT&T and Verizon — both with a long history of adjusting wireless rates and plans to closely match one another (usually to the detriment of the consumer), and politicians and regulators that acquiesce to the wishes of the telecom industry have been around even before Stop the Cap! got started in 2008.

When a market disruptor begins to challenge predictable and stable marketplaces, Wall Street and investors quickly get uncomfortable. So do company executives, whose compensation packages are often dependent on their ability to keep the company’s stock price rising. That is why T-Mobile USA’s “Uncarrier” campaign, which directly challenged long-established wireless industry practices, created considerable irritation for other wireless companies, especially AT&T and Verizon.

The two wireless industry giants initially ignored T-Mobile, suggesting CEO John Legere’s noisy and confrontational PR campaign had no material impact on AT&T and Verizon’s subscriber base and revenue. Ironically, Legere was named CEO one year after AT&T’s 2011 failed attempt to further consolidate the wireless industry with its acquisition of T-Mobile. A very generous deal breakup fee and accompanying wireless spectrum provided by AT&T after the deal collapsed gave T-Mobile some room to navigate and transform the company’s position — long the nation’s fourth largest national wireless carrier behind Sprint. It is now in third place, poaching customers from the other three, and has repeatedly forced other carriers to change their plans and pricing in response.

T-Mobile’s “Uncarrier” promotion.

T-Mobile invested in its network and delivered upgrades, but the real inroads for subscriber growth were made by throwing out the typical wireless carrier business plan. T-Mobile brought back unlimited data and made it a key feature of their wireless plans starting in 2016, a feature AT&T and Verizon had successfully banished, ended the traditional two-year contract, scrapped junk fees and surcharges that customers hated, and ran regular specials that dramatically cut family plan rates. If you lived in an area with solid T-Mobile coverage, the scrappy carrier quickly became a viable option among those contemplating ditching Verizon or AT&T. T-Mobile also benefited enormously from disaffected Sprint subscribers that spent years riding out frequent promises of an in improved network experience that frankly never matched the hype in many areas. Price conscious customers that could not afford a plan with AT&T or Verizon moved even more readily to T-Mobile’s network.

In contrast, AT&T and Verizon have spent the last 20 years consolidating the wireless industry by acquiring regional carriers that had a reputation for good service at a fair price, with the promise that the acquisition by a richer and larger competitor would accelerate network upgrades and improve service. But customers of long-gone or diminished carriers like Alltel, Leap Wireless’ Cricket, MetroPCS, and Centennial Wireless (there are others) that either no longer exist or remain alive only as a brand name on a larger company’s network, noticed higher bills and eliminated coveted features that helped them manage their data and voice plans and costs.

In Europe, recent industry consolidation in some countries has reduced major carriers from four to three, similar to what T-Mobile and Sprint would do in the United States. Pal Zarandy at Rewheel compared consolidated markets in Germany and Austria and discovered gigabyte data pricing where consumers had three options almost doubled in price in Germany and Austria. Austria was 30% less expensive than a control group of six neutral countries when it had three competitors. Today, with two, it is 74% more expensive than its European counterparts. In Germany, prices went from 60% more expensive to nearly triple the rates charged by control group countries.

The merger of Sprint and T-Mobile will dramatically reduce competition in several ways:

1. It will end the pervasive price war for lower-income consumers on postpaid plans. Sprint and T-Mobile directly compete with each other to secure customers that skip AT&T and Verizon Wireless because of their more expensive plans and accompanying higher-standard credit check.
2. Each of the four current national carriers have had to respond to aggressive price promotions for hardware (Sprint, T-Mobile), plans (T-Mobile, Sprint), and loyalty-building rewards (T-Mobile Tuesday). With a merger, those promotions can be scaled back.
3. AT&T and Verizon have been forced to reintroduce unlimited data plans as a direct result of competition from Sprint and T-Mobile. Incidentally, Sprint and T-Mobile’s unlimited data features are different. T-Mobile offers zero rating of lower-resolution videos from selected websites while Sprint offers unlimited access to HD video. In fact, Sprint’s unlimited plan marketing campaign casts T-Mobile’s version in a negative light and was designed to beat T-Mobile’s plan to attract new customers.
4. Since Sprint and T-Mobile are market disruptors, merging them means no new aggressive campaigns to out-disrupt each other to the consumer’s benefit. Instead, they will target the conservative plans of AT&T and Verizon, which requires less innovative marketing and less significant price cuts.

Sprint’s marketing points to differences between its plans and those from T-Mobile, Verizon, and AT&T.

In 2015, the OECD released a definitive study demonstrating the impact of consolidating telecom mergers among top industrialized countries, including the United States. The results were indisputable. If you reduce the number of national carriers to fewer than four, prices rise, service deteriorates — along with innovation and investment, and consumers are harmed. In Canada, where three national carriers dominate, the former Conservative government made finding a fourth national wireless competitor a national policy priority. While Americans gripe about their cell phone bills, many Canadians are envious because they often pay more and live with more restricted, less innovative plans.

This February, market research firm PwC published its own findings, “Commoditization in the wireless telecom industry,” showing that North America remained the most “comfortable” region in the world for wireless carriers looking for big revenue and profits, but that was starting to change because of disruptive marketplace changes by companies like T-Mobile and Sprint.

“In this zone, there is a greater than 50 percent spread in market share and ARPU between highest and lowest market players indicating that commoditization is far off,” PwC notes. For wireless carriers, “commoditization” is bad news. It means the amount of money a carrier can charge for its services is highly constrained because multiple competitors are ready to undercut another carrier’s prices or engage in all-out vicious price wars. In these areas, commoditization also means consumers treat each competitor as a viable player for their business.

In France, four national providers —  Orange, SFR, Bouygues Telecom and Free, have been in a price war for years, keeping France’s wireless prices shockingly low in comparison to North America. The price war in the United States is just beginning. PwC notes as the U.S. market becomes saturated — meaning everyone who wants a cellphone already has one — companies will have to compete more on price and service. T-Mobile and Sprint have been the most aggressive, and the effect is “meaningful competition.” In Canada, where three national carriers exist, competition is constrained by the domination of three large national companies and some regional players. Instead of cutting prices and expanding plan features, many Canadian providers are now trying to bundle their cable, phone, and wireless customers into a single package to “protect [market] share and increase stickiness.” In other words, Canadian wireless carriers are designing plans to hold the line on pricing while keeping customers loyal at the same time.

While average revenue per customer is now around $30 a month in North America, it is less than half that amount in virtually every other region in the world. PwC shows the direct impact of competition starting around 2014, when T-Mobile and Sprint got particularly aggressive about pricing. Wireless carrier ARPU was no longer a nearly flat line from 2009-2013. Now it is dropping faster than every other region in the world as AT&T and Verizon have to change their pricing to respond to competition pressures.

Sprint and T-Mobile’s CEOs launch their PR blitz. (Image: Cheddar)

While reports are likely to surface arguing the alleged pro-consumer benefits of the Sprint/T-Mobile merger, it will be critical to determine who or what entities funded that research. We expect a full-scale PR campaign to sell this merger, using industry-funded astroturf groups, industry-sponsored research, and industry-connected analysis and cheerleading.

In 2011, the Justice Department definitively crushed the proposed merger of AT&T and T-Mobile. It cited strong and convincing evidence that removing a competitor from the wireless market will lead to consumer harm from reduced competition and higher prices. If one substitutes Sprint for AT&T, the evidence still shows Sprint’s own aggressive marketing and promotions (and its competitors’ willingness to match or beat them) will be missing from a marketplace where Sprint no longer exists. That cannot and should not be allowed to happen.

T-Mobile USA and Sprint have agreed to a $26.5 billion all-stock merger, creating the second largest wireless company in the country with 70 million customers, rivaled only by larger Verizon Wireless with 111 million customers and potentially-third-place AT&T with 78 million.

The merged company will keep the T-Mobile name and its maverick CEO, John Legere. The board will include SoftBank CEO Masayoshi Son, who took control of Sprint several years ago but failed to change its status as the fourth largest carrier in the country.

“This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation, and a second-to-none network experience – and do it all so much faster than either company could on its own,” Legere said in the statement.

T-Mobile’s owner, Deutsche Telekom, will control 42% of the company, with SoftBank retaining a 27% ownership stake.

This is the third time Masayoshi has attempted a merger of Sprint and T-Mobile, first failing over regulators’ antitrust/anti-competition objections during the Obama Administration, and a second time over arguments about which company would ultimately control the merged operation.

Wall Street is likely to applaud the deal because of the major cost savings the merger would bring. Tens of thousands of job losses are likely at both companies, delivering significant savings.  Sprint has already slashed its workforce from 40,000 in 2011 to fewer than 28,000 today in a series of cost cutting moves. T-Mobile is bloated by comparison, with 50,000 employees as of 2017, leaving much room for layoffs. Overlapping coverage areas could also be consolidated to reduce equipment and cell tower expenses.

Investors are also concerned about the future rollout costs of 5G wireless technology. Reducing the number of competitors offering the service would allow for higher prices and faster return on investment. But company officials are promoting the merger with claims it will accelerate the deployment of 5G networks and attract new investment. Both companies have complained about profit-draining competition, so removing one competitor to leave just three national choices for wireless service will allow carriers to boost prices and ease price wars. Executives have also worried that as the wireless marketplace gets saturated with smartphones for everyone, growing the business in the future has become a major challenge.

Legere

Consumer groups are reading between the lines of the business case for the merger and argue the reduced competition that will result will lead to higher prices, less aggressive competition and upgrades, and big layoffs. Most observers expect activists will seek to block the merger on anti-competition grounds.

“Unlike good wine or a good movie, this long-rumored deal only gets worse with age and repeat viewings. No one but T-Mobile and Sprint executives and Wall Street brokers wants to see this merger go through. Greed and a desire to reach deeper into people’s wallets by taking away their choices are the only things motivating this deal,” said Free Press policy director Matt Wood. “What we know about the wireless market is that customers actually win when mergers are blocked. That market has been relatively competitive in recent years, but only because the FCC and DoJ signaled they would block AT&T’s attempted takeover of T-Mobile in 2011, along with T-Mobile and Sprint’s several previous attempts to combine.”

Wood notes that because of fierce competition from Sprint -and- T-Mobile, their larger rivals AT&T and Verizon have been forced to reintroduce popular unlimited data plans, cut prices, and get rid of onerous multi-year service contracts.

“The notion that this deal would produce better wireless services is a flat-out fiction. We’ve seen the results from the tax cuts and other destructive deregulation in the Trump era,” Wood added. “The combined entity here would just use this deal to line its own pockets, pay down the massive debt these companies carry, and reward shareholders with more stock buybacks. It would fund further acquisitions of content companies, too, as wireless carriers like Verizon and AT&T rush to join the race for targeted advertising revenues built on privacy abuses like those already built into Facebook’s and Google’s ad models.”

So far, the Trump Administration’s record on mergers is mixed. The Justice Department has shown surprising resistance to blockbuster corporate telecom mergers, and is currently suing AT&T and Time Warner, Inc. to unwind their merger proposal. But Trump’s FCC has bent over backwards in favor of mergers involving the administration’s political allies, notably Sinclair Broadcast Group’s local station acquisitions which have received favorable treatment from FCC Chairman Ajit Pai.

“The legal standard for approving giant horizontal mergers like this is not whether Wall Street or President Trump and his cronies likes it. Communications mergers must enhance competition and serve the public interest,” said Wood. “This deal would do just the opposite: It would destroy competition, eliminate jobs and harm the public in numerous irreversible ways. So unless Ajit Pai wants wants to add yet another blemish to his already disastrous tenure at the helm of the FCC, the chairman should speak out and show us he’s willing to do more than rubber stamp any harmful deal that crosses his desk.”

The merger is expected to get significant regulatory scrutiny.