As the wireless industry awaits an announcement that T-Mobile and Sprint have an agreement to merge, some on Wall Street are skeptical the merger deal will win approval, especially if Republicans lose their majority in the House and Senate in the 2018 mid-term elections.

Matthew Niknam of Deutsche Bank has warned his clients any merger deal not approved by next November is more likely to fall apart if  Democrats take back control of Congress:

“There also may be greater incentive for both sides to evaluate a potential deal sooner rather than later, given the risk that deal approval may slip beyond mid-term elections in late 2018 (with the risk that more populist/less corporate-friendly sentiment may become more pervasive in D.C.) In fact, we note that the Democrats’ ‘Better Deal’ agenda (unveiled in July 2017, targeted towards 2018 elections) highlights ongoing corporate consolidation as a threat to U.S. consumers, and proposes sharper scrutiny of potential deals.”

Nikram writes there has not been a lot of interest by cable operators to acquire Softbank’s Sprint, which has been effectively up for sale or merger for at least a year.

Fierce Wireless notes Cowen & Company Equity Research last month suggested the chance of a merger between T-Mobile and Sprint was now 60-70%, down from 80-90% originally. The reason for the pessimism is their estimate that any deal’s chance of winning approval was only about 50%. The odds get even worse if the Democrats start to check the Trump Administration’s power.

Public policy groups and well-compensated industry opinion leaders are already preparing to wage a PR war over a deal that would reduce America’s major wireless carriers to just three.

Professor Daniel Lyons, well-known for writing pro-industry research reports defending almost anything on their corporate policy wish list, is hinting at a possible strategy by the merging carriers by suggesting neither could survive without a merger.

Good analysis but incomplete. This assumes #Sprint and #TMobile would both remain viable w/o merger. I’m not convinced (either way yet). https://t.co/8WaZ2b8iJT

— Daniel Lyons (@ProfDanielLyons) October 10, 2017

Most analysts predict that with just three national wireless carriers, the U.S. wireless marketplace would more closely resemble Canada — widely seen as more carrier-friendly and expensive.

Wall Street analysts are debating exactly how many tens of thousands of jobs will be lost in a merger, and the numbers are staggering.

Jonathan Chaplin of New Street Research predicts the merger would cost the country more jobs than now exist at Sprint.

He predicts “approximately 30,000 American jobs” will be permanently lost in a merger. Together the two companies currently employ 78,000 — 28,000 at Sprint and 50,000 at T-Mobile.

Craig Moffett of MoffettNathanson Research was more conservative, predicting 20,000 job losses would come from a merger. But the impact would not be limited to just direct hire employees.

“We conservatively estimate that a total of 3,000 of Sprint and T-Mobile’s branded stores (or branded-equivalent stores) would eventually close,” Moffett’s report said.

Golden parachutes will make some executives at Sprint and T-Mobile very wealthy if a merger succeeds.

Many T-Mobile and Sprint stores are located in malls and retail “power centers” where maintaining both stores would be unnecessary. Also hard hit would be wireless tower owners and those employed to care for them. Most believe Sprint’s CDMA wireless network would eventually be decommissioned in a merger, and many of its cell sites would be mothballed. Sprint’s biggest asset is its currently unused trove of high frequency wireless spectrum it could use to deploy future 5G services, but those services would likely be provided from small cells mounted on utility poles and street lights.

The biggest winners in any deal will likely be top executives at Softbank, Sprint, and T-Mobile, Wall Street banks providing deal advisory services and financing, and shareholders, who can expect higher earnings from a less competitive marketplace. Fierce competition from T-Mobile and Sprint were both directly implicated for threatening revenues for all four wireless companies, who have had to respond to aggressive promotions by cutting prices and offering more services for less money.

The Trump Administration’s choices of Ajit Pai for Chairman of the FCC and Makan Delrahim as United States Assistant Attorney General for the Antitrust Division of the Justice Department are both widely seen as signals the White House is not going to crack down on competition-threatening merger deals. Mr. Pai has recently improved the foundation for a T-Mobile/Sprint merger by declaring the wireless industry to be suitably competitive, something required before seriously contemplating reducing the number of competitors.

Eight Democrats sent a letter to the FCC chairman last week calling on both the FCC and the Justice Department to begin an investigation into the possible merger as soon as possible, citing possible antitrust concerns.

The text of the letter:

Dear Chairman Pai and Assistant Attorney General Delrahim:

We write to ask you to begin investigating the impact of a merger between T-Mobile International and Sprint Corporation. According to Pew Research, over three-quarters of Americans now own smartphones, driven by a 12 percent increase in smartphone ownership among adults over age 65 and a 12 percent increase in smartphone ownership in households earning less than $30,000 a year since 2015. Today, smartphones are not really just phones at all. For many, they are the primary connection to the internet. An anticompetitive acquisition would increase prices, burdening American consumers, many of whom are struggling to make ends meet, or forcing them to forego their internet connection altogether. Neither outcome is acceptable.

We believe that an investigation is appropriate for three reasons. First, aggressive antitrust enforcement benefits consumers and competition in the wireless market. Second, a combination of T-Mobile and Sprint would raise significant antitrust issues and could dramatically harm consumers. Third, although a deal has not been announced, the two parties have made repeated attempts to merge, and current reports suggest they are close to an agreement. Your agencies should be in a position to fully – but expeditiously – investigate and analyze this deal should it occur.

Competition among wireless carriers has lowered prices, increased quality, and driven innovation

Consumers have benefited from competition among the four national carriers, and we have effective antitrust enforcement to thank for that competition. In the summer of 2011, the Department of Justice’s (DOJ) Antitrust Division filed suit to block AT&T’s proposed acquisition of T-Mobile despite claims that T-Mobile was a weak competitor and, without the deal, remaining options “won’t be pretty.”  The FCC likewise outlined its opposition to the deal that fall. The deal collapsed, but T-Mobile did not. It competed. It spent billions improving its network, and it offered better terms; for example, it eliminated two-year contracts and data overages. It enticed customers to switch providers by paying their termination fees. And, its competitors had to respond in kind. As William Baer, former head of DOJ’s Antitrust Division, has explained, consumers have enjoyed “much more favorable competitive conditions” since that transaction was blocked.  In May 2017, the Wall Street Journal reported that cellphone plan prices were down 12.9 percent since April 2016, the largest decline in 16 years, and attributed the drop to “intense competition” among the top cell service providers: Verizon, Sprint, T-Mobile, and AT&T.  Paul Ashworth, chief U.S. economist at Capital Economics, specifically suggested that it was caused by the “price war that has broken out among cell-phone service providers, with all the big providers now offering unlimited data plans at cheaper rates.”

Further, the fact that T-Mobile and Sprint appear to be each other’s primary competitor raises additional concerns about this potential horizontal merger. That direct competition has particularly benefited lower-income families and communities of color, many of whom rely on mobile broadband as their primary or only internet connection.  Sprint and T-Mobile have offered products and service options that are more appealing to lower-income consumers. For example, T-Mobile was the first major carrier to offer a no contract plan,  and both Sprint and T-Mobile have been leaders in offering prepaid and no credit check plans, which allow people who may have poor credit to obtain a cell plan and ultimately access the internet.

A combination of T-Mobile and Sprint would raise significant antitrust concerns

Not surprisingly, when T-Mobile and Sprint first discussed a merger in 2014, both of your predecessors expressed skepticism. William Baer stated that “[I]t’s going to be hard for someone to make a persuasive case that reducing four firms to three is actually going to improve competition for the benefit of American consumers.”  Similarly, former FCC Chairman Tom Wheeler simply explained, “[f]our national wireless providers are good for American consumers.”

What is surprising, however, is that a few years later the two companies have revived their merger talks. Whether one looks at cellphone competition as a national market or as numerous local markets, T-Mobile’s acquisition of Sprint would very likely be presumptively anticompetitive. We are concerned that this consolidation would increase prices, reduce incentives to offer new plans, and allow the remaining carriers to curtail their investment in their networks. Further, given both companies’ focus on competing for lower-income customers, the combination of Sprint and T-Mobile could disproportionately harm those consumers. In addition to potentially raising retail prices, the remaining carriers are also likely to increase prices to companies like Straight Talk, which buys bulk access to one or more of the four national carriers and advertises almost exclusively to lower-income communities.

T-Mobile and Sprint will no doubt claim that the merger will leave sufficient competition, increase cost savings, and spur investment. The agencies will need to examine these issues in depth and make the ultimate determination as to whether the effect of such a deal would be to undermine or promote competition. The very complexity of the issues only further justifies the need for the agencies to begin examining the markets and investigating the competitive dynamics sooner rather than later.

Initiating an investigation is appropriate

Although the antitrust agencies often wait for an official filing before opening an investigation, nothing requires this delay. For example, in May, the Antitrust Division announced an investigation of the possible acquisition of the Chicago Sun-Times by the owner of the Chicago Tribune.  The two companies in question here have had a longstanding interest in combining, and, according to reports, an agreement between Sprint and T-Mobile may be weeks away.

Beginning an investigation into a merger of T-Mobile and Sprint now will allow your agencies to quickly, but fully, review the agreement if it is announced. Indeed, multiple news sources are reporting that the two parties are close to a deal in principle. The likelihood of the transaction occurring combined with the serious issues that it raises provide compelling reason for DOJ and the Federal Communication Commission to begin investigating the potential transaction.

For the reasons stated above, we urge you to begin to examine this potential transaction now. Competition among four major cell phone carriers has benefited consumers with lower prices, better service, and more innovation. We are concerned that consolidation will thwart those goals. Thank you for your prompt attention to this matter.

Sincerely,

Amy Klobuchar (D-Minn.)
Al Franken (D-Minn.)
Patrick Leahy (D-Vt.)
Richard Blumenthal (D-Conn.)
Ron Wyden (D-Ore.)
Kirsten Gillibrand (D-N.Y.)
Ed Markey (D-Mass.)
Jeff Merkley (D-Ore.)

U.S. cell phone providers are facing increasing criticism they are dragging their feet on restoring cell service in Puerto Rico while Mexican-owned Claro has now successfully restored service in 28 of the territory’s 78 municipalities.

Claro Puerto Rico, owned by Mexican billionaire Carlos Slim’s America Movil, has dramatically outpaced AT&T, T-Mobile, and Sprint in getting their damaged cell phone facilities back up and running. Claro is Puerto Rico’s second most popular cell company behind AT&T.

“Claro is the only one with service here,” Francisco Portales, 47, a customer of privately held Puerto Rico-based network provider Open Mobile told a Reuters reporter while waiting outside the Claro store in Fajardo hoping to buy a phone.

Looking for a signal.

The FCC’s latest update on Tuesday reported about 88% of Puerto Rico is still without cell service, but the agency does not break down network repairs by carrier, and American providers have declared their specific restoration plans to be confidential.

While AT&T complained the lack of commercial power remained its biggest problem, Claro said it had pre-positioned generators, diesel fuel, battery backups, and vehicles 72 hours before the hurricane hit, which appears to have made all the difference in restoring service.

Sprint said late last week its towers were still standing and “largely intact” although it gave no specific information on when service might be restored. T-Mobile was more frank, reporting “it’s going to be a long road to recovery.”

Claro is not taking advantage of its position as the island’s most reliable post-hurricane carrier, allowing customers of other providers to roam on its network where a signal is available. That may be all the good publicity Claro needs to win over new customers after the hurricane damage is repaired.

Claro’s repair trucks.

Mercedes Saldana, a 54-year-old school cafeteria worker and Sprint customer is just one of many now searching shops for a Claro prepaid phone.

“I don’t have any service, none,” she said. “We don’t know when Sprint’s going to be connected again.”

Customers unwilling to switch carriers and won’t roam may have long travel times ahead of them to find a signal. Luis Pacheco, 64, was planning to drive with his wife to Canovanas — 30 to 40 minutes west — in hopes of finding a cell signal to text his daughter in California. That is the nearest community where AT&T has a signal at the moment.

Before the storm, AT&T dominated Puerto Rico with a 34% market share, followed by Claro Puerto Rico with a 26% share. T-Mobile was third with 19%, Open Mobile has 11% and Sprint 10%. Verizon Wireless has no network facilities in Puerto Rico, but travelers with Verizon phones are granted roaming access on Claro’s network.

AT&T, Verizon Wireless, Sprint, and T-Mobile are sending technicians to hundreds of cell sites across Florida to top off fuel generators, test back up batteries, and protect facilities from Hurricane Irma’s anticipated storm surge and associated flooding.

“Customers rely on us, especially during major storms,” said Joe York, AT&T Florida president. “That’s why we practice readiness drills and simulations throughout the year. We do all we can to have our networks prepared when severe weather strikes. We’ve worked for the past few days to position equipment and crews to respond to the storm. We’re closely linked with Florida public officials in their storm response efforts. With a storm of this size, we may have some outages. But if service goes down, we’ll do all we can to get it back up as fast as possible.”

With landfall possible along the Florida coast or inland, Verizon pointed out that in Florida, since last hurricane season, it has densified its network with 4G, fortified coverage along evacuation routes, put cell sites equipment on stilts and installed new systems in hospitals, government and emergency facilities, and high-traffic public areas.

“The country is only beginning to wrestle with recovery efforts from Harvey, and already, residents of Florida and the Caribbean are bracing for another potentially devastating storm in Hurricane Irma,” said Sprint CEO Marcelo Claure. “During times like these, the cost of staying connected to friends and loved ones should be the last thing on anyone’s mind, and we want to do what we can to support our customers across impacted areas.”

Hurricane Irma’s impact on Puerto Rico.

AT&T and Verizon Wireless are positioning portable cell tower trailers just outside of areas anticipated to take the brunt of the hurricane. AT&T in particular has a lot to prove as its network now includes FirstNet — a public private wireless broadband network for emergency responders that also depends on AT&T’s wireless networks. States are still in the process of opting in to AT&T’s FirstNet. The company has more than 700 pieces of emergency cellular equipment, including Cell on Wheels, Cell on Light Trucks, portable trailers and generators, and even the possibility of deploying Cells on Wings — airborne cell towers that can restore cell service in areas where roads are inaccessible because of floods.

Wireline companies are also positioning repair crews in the region to bring service back online. Other technicians are checking on emergency generator and battery backup power, particularly for maintaining landline service.

“Our team is working to prepare for extreme weather and will be there for our business and residential customers to quickly and safely restore any affected network services,” reports Frontier Communications, which provides service in former Verizon landline service areas.

The phone company is reminding landline customers that not all phones will operate during a power outage, but that does not mean Frontier’s landline network is down.

“Customers who rely on cordless phones should consider plugging a traditional corded phone directly into the wall. In the event of a commercial power outage, corded phones on the copper network will still operate; cordless ones will not,” the company says. “If commercial power is unavailable, generators and batteries in Frontier’s central offices serve as a backup. Phone lines generally will have enough power in them to use a corded phone. For customers using FiOS phone services, the battery backup will supply voice service for up to eight hours.”

The company also warns customers to watch out for damaged utility lines after the storm is over.

“Stay far away from any downed cables or power lines. Contact Frontier at 800-921-8102 (business) or 800-921-8101 (residential) to report any fallen telephone poles or cables.”

Some companies are offering customers a break on their bills:

• Verizon: Landline customers will not pay any long distance charges for calls to Anguilla, the British Virgin Islands, Puerto Rico, Dominican Republic, Haiti, and the Turks and Caicos Islands from Sept. 6-9. Taxes and any government surcharges applicable will still apply. Verizon Wireless customers inside the U.S. will not be charged for texts or calls originating in the U.S. to those same countries and territories for the same period.
• T-Mobile and MetroPCS customers in affected areas of Puerto Rico:  Will get calls, texts, and unlimited data free from Sept. 6th through Sept. 8th. This free service will be available to customers in the 787 and 939 area codes.
• Sprint: Effective today through Sept. 9, 2017, Sprint will waive call, text and data overage fees for its Sprint, Boost Mobile and Virgin Mobile customers in Puerto Rico and the U.S. Virgin Islands. For Sprint, Boost Mobile and Virgin Mobile customers in the U.S., the company will also waive all international call and text overage fees to the following: Anguilla, Dominican Republic, Haiti, Turks and Caicos, and British Virgin Islands. For the same period, Sprint will also waive roaming voice and text overage fees for its customers in those locations. Fees will be waived during the time specified.
• Comcast: Opening more than 137,000 XFINITY Wi-Fi hotspots throughout Florida to anyone who needs them, including non-XFINITY customers, for free. For a map of XFINITY Wi-Fi hotspots, which are located both indoors and outdoors in places such as shopping districts, parks and businesses, visit Xfinity.com/wifi. Once in range of a hotspot, select the “xfinitywifi” network name in the list of available hotspots and then launch a browser. Comcast internet customers can sign in with their usernames and passwords and they will be automatically connected to XFINITY Wi-Fi hotspots in the future. Non-Comcast internet subscribers should visit the “Not an Xfinity Internet Customer” section on the sign-in page to get started. Non-customers will be able to renew their complimentary sessions every 2 hours through Sept. 15, 2017.

AT&T Offers These Customer Tips:

• Keep your mobile phone battery charged. In case of a power outage, have another way to charge your phone like an extra battery, car charger or device-charging accessory. Applicable sales tax holidays are a great time to stock up on cell phone accessories.
• Keep your mobile devices dry. The biggest threat to your device during a hurricane is water.  Keep it safe from the elements by storing it in a baggie or some other type of protective covering, like an Otterbox phone cover.
• Have a family communications plan. Choose someone out of the area as a central contact.   Make sure all family members know who to contact if they get separated. Most importantly, practice your emergency plan in advance.
• Program all of your emergency contact numbers and e-mail addresses into your mobile phone. Numbers should include the police department, fire station and hospital, as well as your family members.
• Forward your home number to your mobile number in the event of an evacuation. Call forwarding is based out of the telephone central office. This means you will get calls from your landline phone even if your local telephone service is disrupted. If the central office is not operational, services such as voicemail and call forwarding may be useful.
• Track the storm and access weather information on your mobile device. Many homes lose power during severe weather. You can stay up to speed as a DIRECTV customer, by streaming local weather channels using the DIRECTV application on your smartphone. If you subscribe to mobile DVR, you can also stream every channel directly to your phone.
• Camera phones provide assistance. If you have a camera phone, take, store and send photos and video clips of damage to your insurance company.
• Use location-based technology.  Services like AT&T Navigator and AT&T FamilyMap can help you find evacuation routes or avoid traffic from downed trees or power lines. They can also track a family member’s wireless device if you get separated.
• Limit social media activity. Keep social media activity to a minimum during and after a storm to limit network congestion and allow for emergency communications to go through.

Business Tips:

• Set up a call-forwarding service to a backup location. Set up a single or multiple hotline number(s) for employees, their families, customers and partners so they all know about the business situation and emergency plan.
• Back up data to the Cloud. Routinely back up files to an off-site location.
• Outline detailed plans for evacuation and shelter-in-place. Practice these plans (employee training, etc.). Establish a backup location for your business and meeting place for all employees.
• Assemble a crisis-management team. Coordinate efforts with neighboring businesses and building management. Disasters that affect your suppliers also affect your business. Outline a plan for supply chain continuity for business needs.

Keeping the lines open for emergencies:

During evacuations, the storm event and its aftermath, network resources will likely be taxed. To help ensure that emergency personnel have open lines, keep these tips in mind:

• Text messaging. During an emergency situation, text messages may go through more quickly than voice calls because they require fewer network resources. Depending on your text or data plan, additional charges may apply.
• Be prepared for high call volume. During an emergency, many people are trying to use their phones at the same time. The increased calling volume may create network congestion, leading to “fast busy” signals on your wireless phone or a slow dial tone on your landline phone. If this happens, hang up, wait several seconds and then try the call again. This allows your original call data to clear the network before you try again.
• Keep non-emergency calls to a minimum, and limit your calls to the most important ones. If there is severe weather, chances are many people will be attempting to place calls to loved ones, friends and business associates.

Additional information and tips for disaster preparedness can be found at www.att.com/vitalconnections.

Sprint has reintroduced a promotion giving customers up to five lines of “unlimited” voice, text, and data service for $90 a month.

Sprint’s Unlimited Freedom plan sells for $50 for the first line and $40 for the second line, with lines 3-5 free of charge until Oct. 31, 2018.

Sprint CEO Marcelo Claure promoted the plan as an antidote to Verizon’s changes to its unlimited data plans.

“Verizon is charging MORE for LESS, but Sprint is bringing back 5 lines of unlimited for $90/mo,” Claure tweeted.

The promotion also bashes Verizon for its aggressive video throttling, noting its throttling isn’t as bad, supporting:

• Streaming video (up to 1080p)
• Streaming gaming (up to 8Mbps)
• Streaming music (up to 1.5Mbps)
• Unlimited high-speed data for most everything else.

Except it is not really unlimited. In the fine print, Sprint notes: “Data deprioritization during congestion after 23GB/mo.”

It is also not a permanent rate. The promotion expires in October 2018, after which rates increase.

Other providers have yet to respond to Sprint’s new offer.

The French press did not take kindly to comments from MoffettNathanson analyst Craig Moffett, who suggested Altice’s ability to swallow up Charter Communications in a deal worth at least $185 billion dollars was “not credible.”

Panelists appearing on French language business news channel BFM TV chuckled at Mr. Moffett’s ability to predict Altice chairman Patrick Drahi’s next move.

“Mr. Moffett does not know Mr. Drahi like we’ve come to know Mr. Drahi,” noted one analyst. “We’ve learned not to underestimate his ability to put together business deals that some would call bold, others financially reckless, yet he does it again and again. If Mr. Drahi wants [Charter], he shall have it.”

French business reporters have scoffed at Altice for years, well before the company arrived in the United States to acquire Cablevision and Suddenlink and rebrand them as Altice.

“When you don’t take him seriously, that is when he strikes,” reported BFM.

Drahi is a master of using other people’s money to finance massive telecommunications deals. For him, bigger is essential, and that means he’d either have to acquire Comcast or Charter or hope to build a cable empire out of smaller cable companies he’d acquire and combine.

Drahi (center)

Multiple independent media outlets are tracking Drahi’s movements. Le Figaro reports Drahi has spent months laying the groundwork for his next big takeover in the United States and the newspaper knew all along it would be a major deal, because Drahi is banking on the prospects of emptying the pockets of millions of American cable subscribers to fund his operations. Americans pay vastly more for cable television and broadband service than consumers in Europe because of a lack of regulation and competition.

The newspaper adds that Drahi routinely tells investors and reporters he wants to be “number one or two” in all countries where he does business. Right now Altice is the fourth largest cable operator in the United States, an absolutely intolerable situation for Mr. Drahi.

Drahi is well aware of the enormous cost of a Charter acquisition, and Bloomberg News reports he is considering asking the Canada Pension Plan Investment Board and BC Partners to help fund the potential merger. Both groups are already familiar with Mr. Drahi and Altice and were instrumental in his acquisition of Cablevision and Suddenlink. Despite the potential help, Moffett still believes Charter is well outside of Altice’s reach.

“None of the proposed suitors—Verizon, SoftBank, Altice—have the balance sheet to acquire Charter,” Moffett wrote his investor clients in a research note. He notes Greg Maffei, chairman of Liberty Broadband, is unconvinced of the wisdom of allowing a buyer to use its other highly leveraged companies as compensation in a merger deal.

Moffett believes the deal has to make sense to two people to proceed – John Malone, Charter’s largest shareholder and ironically Drahi’s mentor and Charter CEO Thomas Rutledge, who was America’s highest paid executive in 2016. He stands to get considerably richer if he can fend off a deal until he achieves tens of millions in stock option awards, first when Charter’s average share price tops $455.66 a share and stays there for at least 60 days and then again when the share price exceeds $564 a share and stays there for 60 days. This morning, Charter Communications was selling at just over $399 a share. All of the merger and acquisition talk is helping boost Charter’s stock price, but Rutledge doesn’t want the company sold until after he can walk out with his compensation package fully funded or finds a buyer willing to make him whole.

As for Malone, he’s always been willing to cash out, but only when the deal makes financial sense to him and avoids taxes.

“Let’s put a finer point on it,” Moffett added. “The ONLY reason [Liberty Media chief] John Malone would be willing to swap his equity in Charter for equity in Altice would be if he believed, with real conviction, that Altice could simply manage the asset better than Charter’s current management.  It is not a knock on Altice to suggest that there is simply no way that Liberty would believe that. Next.”

But then, Time Warner Cable’s management didn’t take an acquisition offer from Charter Communications seriously either when it was first proposed. Time Warner Cable believed selling to Comcast made better sense to shareholders and executives. Like Altice, Charter was a much smaller cable operator proposing to buy a much larger one. In the end, regulators rejected the deal with Comcast and with Wall Street beating the drum for someone to acquire Time Warner Cable, Charter’s sweetened second offer was readily accepted.

Charter’s biggest downside to a potential acquirer is the $60 billion in debt it took on buying Time Warner Cable and Bright House Networks. Debt at SoftBank also makes Moffett skeptical of a deal between Sprint and Charter.

“They [SoftBank] already sit on $135 billion of debt,” Moffett wrote. “Add Charter’s $63 billion and you’re within a rounding error of $200 billion. Add any cash at all for Charter’s equity and you’re flirting with a quarter trillion (trillion!) dollars of debt. Were SoftBank to buy Charter, they would become not only the most heavily indebted non-financial company the world has ever seen, they would in fact be more indebted than most countries.”

To avoid crushing debt scuttling a deal, Citigroup speculated in a report to their investors that Comcast and Altice could partner up to divvy up Charter Communications themselves. The Wall Street bank speculates Comcast would help finance a deal if it meant it would take control of Charter’s customers formerly served by Time Warner Cable. Legacy Charter customers and those formerly served by Bright House would become part of the Altice family.

Such a transaction would likely overcome Malone’s objections over an Altice-only offer leaving him with a large pile of Altice USA stock.

Just as with Time Warner Cable, once a company is seen willing to deal, fervor on Wall Street to make a deal — any deal — can drive companies into transactions they might not otherwise have considered earlier. If Charter is seen as a seller, there will be growing pressure to find a buyer, if only to satiate investors and executives hoping for a windfall and Wall Street banks seeking tens of millions in deal advisory fees.