If you can’t beat ’em, join ’em.

Charter Communications this week quietly announced a cord-cutters cable TV package that works on your tablet, smartphone, Xbox One, Roku, and Samsung Smart TVs.

Spectrum TV Stream ($19.95/mo) gives access to a sports-free, slimmed down basic cable TV package of popular cable networks and, rare among online streaming services, access to your local ABC, CBS, FOX, NBC, and PBS stations. You also get access to Spectrum News (where available), a 24/7 local news service carried over from the days of Time Warner Cable and Bright House Networks.

The basic cable networks covered include:

• CNN
• Bravo
• A&E
• AMC
• Discovery
• Food
• TBS
• Lifetime
• FX
• National Geographic Channel
• HGTV
• The History Channel
• Freeform
• Hallmark Channel
• Hallmark Movies
• Animal Planet
• E!
• Lifetime Movie Network
• Oxygen
• TNT
• TLC
• USA
• WGN America
• Spectrum News

Remarkably, customers can buy premium movie channels in this package for less than what they would pay with Spectrum’s traditional cable TV package. For 36 months, customers can get HBO, Showtime, Starz, Starz Encore, and The Movie Channel for $15 more per month (or $7.50 each). Oddly, Cinemax and Epix are not included.

(Image courtesy of Ian Littman)

Customers who sign up will also be able to access Spectrum TV apps and have an authenticated subscriber login to access on-demand programming from the respective websites of the networks included in the package. Spectrum also will include about 5,000 free on-demand streaming titles.

There are some restrictions with the service. You must be a Spectrum broadband customer. We are uncertain if customers still holding on to their Time Warner Cable or Bright House packages will qualify. You must not owe any past due balance to Charter Communications (or TWC or BH), and it seems likely Spectrum will charge you the Broadcast TV surcharge (usually $4-7 a month depending on the market), plus taxes and fees.

There may be availability restrictions as well. We do know the service is available in parts of California and Texas, but you may need to call to ascertain availability in your area.

To protect the cable TV industry from any undue competition, the service is only being sold in Charter/Spectrum service areas, so if you thought this would help you cancel Comcast or Cox cable TV, forget it.

With Sprint and T-Mobile reportedly far apart in prospective merger talks, Sprint has given a two-month exclusive window to Charter Communications and Comcast Corp. to see if a wireless deal can be made between the wireless carrier and America’s largest cable operators. But any deal could initially burden Sprint’s fourth place network with more traffic, potentially worsening performance for Sprint customers until additional upgrades can be undertaken.

The two cable companies are reportedly seeking a favorable reseller arrangement for their forthcoming wireless offerings, which would include control over handsets, SIM cards, and the products and services that emerge after the deal. Both Charter and Comcast also have agreements with Verizon Wireless to resell that network, but only within the service areas of the two cable operators. Verizon’s deal is far more restrictive and costly than any deal Charter and Comcast would sign with Sprint.

Such a deal could begin adding tens of thousands of new wireless customers to Sprint’s 4G LTE network, already criticized for being overburdened and slow. In fact, Sprint’s network has been in last place for speed and performance compared with AT&T, T-Mobile, and Verizon for several years. A multi-year upgrade effort by Sprint has not delivered the experience many wireless customers expect and demand, and Sprint has seen many of its long-term customers churn away to other companies — especially T-Mobile, after they lost patience with Sprint’s repeated promises to improve service.

PC Magazine’s June 2017 results of fastest mobile carriers in United States shows Sprint in distant fourth place.

At least initially, cable customers switching to their company’s “quad-play” wireless plan powered by Sprint may find the experience cheaper, but underwhelming.

Sprint chairman Masayoshi Son was initially aggressive about upgrading Sprint’s network with funds advanced by parent company Softbank. But it seems no matter how much money was invested, Sprint has always lagged behind other wireless carriers. In recent years, those upgrades seem to have diminished. Instead, Son has been aggressively trying to find a way to overcome regulator and Justice Department objections to his plan to merge Sprint with third place carrier T-Mobile USA. Likely part of any deal with Charter and Comcast would be a substantial equity stake in Sprint, or some other investment commitment that would likely run into the billions. That money would likely be spent bolstering Sprint’s network.

A deal with the two cable companies could also give Sprint access to the cable operators’ large fiber networks, which could accelerate Sprint’s ability to buildout its 5G wireless network, which will rely on small cells connected to a fiber backhaul network.

Less likely, according to observers, would be a joint agreement between Charter and Comcast to buy Sprint, which is currently worth $32 billion but also has $32.6 billion in net debt. Sprint’s talks with Charter and Comcast do not preclude an eventual merger with T-Mobile USA. But any merger announcement would likely not come until late this summer or fall, if it happens at all.

Wall Street is downplaying a Sprint/T-Mobile combination as a result of the press reports indicating talks between the two companies appear to have gone nowhere.

“We didn’t give a Sprint/cable deal high odds,” wrote Jonathan Chaplin of New Street Research.  “While a single cable company entering into any transaction with Sprint has a strong likelihood of regulatory approval, a joint bid raises questions that add some uncertainty. However, the deal corroborates our view that Sprint isn’t as desperate as many thought and T-Mobile didn’t have the leverage that most seemed to assume.”

Malone

“An equity stake or outright acquisition is less likely in our view, but not out of the realm of possibility,” said Mike McCormack of Jefferies. “In our view, this likely suggests major hurdles in any Sprint/T-Mobile discussions and could renew speculation of T-Mobile and Dish should Sprint talks falter.”

Marci Ryvicker of Wells Fargo believes Comcast will be “the ultimate decision maker” as to which path will be taken. Amy Yong of Macquarie Research seems to agree. “We note Comcast has a strong history of successfully turning around assets and could contribute meaningfully to Sprint; NBCUniversal is the clearest example. But she notes Charter is likely to be distracted for the next year or two trying to integrate Time Warner Cable into its operations.

Behind the cable industry’s push into wireless is Dr. John Malone, Charter’s largest shareholder and longtime cable industry consigliere. Malone has spent better than a year pestering Comcast CEO Brian Roberts to join Charter Communications in a joint effort to acquire a wireless carrier instead of attempting to build their own wireless networks. But both Roberts and Charter CEO Thomas Rutledge have been reluctant to make a large financial commitment in the wireless industry at a time when the days of easy wireless profits are over and increasing competition has forced prices down.

For Malone, wireless is about empowering the cable industry “quad play” – bundling cable TV, internet, phone, and wireless into a single package on a single bill. The more services a consumer buys from a single provider, the more difficult and inconvenient it is to change providers.

Malone also believes in a united front by the cable industry to meet any competitive threat. Malone favored TV Everywhere and other online video collaborations with cable operators to combat Netflix and Hulu. He also advocates for additional cable industry consolidation, in particular the idea of a single giant company combining Charter, Cox, and Comcast. Under the Trump Administration, Malone thinks such a colossal deal is a real possibility.

If the average customer isn’t paying $90 a month for broadband service, they are paying too little and that needs to stop.

That is the view of persistent rate hike advocate Jonathan Chaplin, a Wall Street analyst with New Street Research, who has advocated for sweeping broadband rate increases for years.

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

Companies that fail to raise prices risk being downgraded by analysts with views like these, which can have a direct impact on a stock’s share price and the executive compensation and bonus packages that are often tied to the company’s performance.

But there is a dilemma and disagreement between some cable industry analysts about how much companies can charge their customers. Companies like Cable ONE have been aggressively raising broadband prices to unprecedented levels in some of the poorest communities in the country, which worries fellow Wall Street analyst Craig Moffett from MoffettNathanson LLC.

“Never mind that the per capita income in Cable ONE’s footprint is the lowest (by far) of the companies we [Moffett’s firm] cover, or that the percentage of customers living below the poverty line is the highest (also by far),” Moffett told his investor subscribers. “What matters is that there is very little competition in Cable ONE’s footprint. If you want high-speed broadband, where else are you going to go? The unspoken fear among their larger peers is that over-reliance on broadband pricing invites regulatory intervention, not just for Cable ONE, but for everyone.”

Chaplin thinks the risk from gouging broadband customers is next to zero. With cable TV becoming less profitable every day, all the big profits that can be made will be made from broadband, where cable operators often enjoy a monopoly on high-speed service.

According to Chaplin, if customers value internet access, they will pay the higher prices cable companies charge. So what are companies waiting for? Raise those prices!

Copps (Image: Peretz Partensky)

Former interim FCC chairman and commissioner Michael Copps has become so disillusioned with the agenda of the Trump Administration’s FCC, he’s ready to conclude its current leadership under Chairman Ajit Pai represents the worst FCC ever.

In an effort to erase the Obama Administration, President Trump has made it a priority to actively reverse the former administration’s policies. The FCC is no exception, and according to an article published by Moyers & Co., the Republican majority running the FCC these days are actively on board White House strategist Steve Bannon’s campaign to “deconstruct the administrative state.”

Author Michael Winship calls Pai an enthusiastic supporter of Donald Trump’s “doctrine of regulatory devastation,” and it appears Copps agrees as he comments on the current FCC agenda to dismantle set-top box competition, Net Neutrality, Lifeline internet service for the poor, restricting media consolidation, consumer’s privacy rights, and general oversight of the telecom industry.

Pai’s Garbage

“I think the April 26 speech that Ajit Pai gave at the Newseum, which was partially funded, I think, by conservative activist causes, was probably the worst speech I’ve ever heard a commissioner or a chairman of the FCC give,” Copps said. “It was replete with distorted history and a twisted interpretation of judicial decisions. And then, about two-thirds of the way through, it became intensely political and ideological, and he was spouting all this Ronald Reagan nonsense — if the government is big enough to do what you want, it’s big enough to take away everything you have, and all that garbage. It was awful. It’s maybe the worst FCC I’ve ever seen or read about.”

Today, Copps is special adviser for the Media and Democracy Reform Initiative at the nonpartisan grassroots organization Common Cause. He “just may be,” Bill Moyers once said, “the most knowledgeable fellow in Washington on how communications policy affects you and me.”

Ajit Pai at Newseum, Apr. 26, 2017 (Image: C-SPAN)

Under the Trump Administration, Copps believes we are watching a wholesale transfer of the most important tools in a democracy — real news, diversity of ideas, and access to an open internet into the hands of a handful of mega-corporations and special interests that have bankrolled the Republican party and the election of Donald Trump.

“This is not populism; this is a plutocracy,” Copps warned. “Trump has surrounded himself with millionaires and billionaires, plus some ideologues who believe in, basically, no government. And the Trump FCC already has been very successful in dismantling lots of things — not just the Net Neutrality that they’re after now, but privacy, and Lifeline, which is subsidized broadband for those who can’t afford it. And just all sorts of things up and down the line. The whole panoply of regulation and public interest oversight — if they could get rid of it all, they would; if they can, they will.”

In fact, Copps noted, there were several conservative advisers on Trump’s transition team that advocated abolishing the FCC outright, believing consolidated telecom companies and media empires can successfully regulate themselves.

“I don’t know if Donald Trump is good for the country. but he’s damn good for CBS.”

“[CBS CEO Les] Moonves said it best: ‘I don’t know if Donald Trump is good for the country. but he’s damn good for CBS,'” Copps said. “The election was just a glorified reality show and I do not think it was an aberration. Until we get that big picture straightened out and we get a civic dialogue that’s worthy of the American people and that actually advances citizens’ ability to practice the art of self-government — that informs citizens so they can cast intelligent votes and we stop making such damn-fool decisions — we’re in serious trouble.”

Copps complained the mainstream media isn’t even covering stories about digital democracy, instead preoccupied with 24/7 coverage of the circus in Washington, D.C.

“I don’t think right now that commercial media is going to fix itself or even that we can save it with any policy that’s likely in the near-term, so we have to start looking at other alternatives,” Copps advised. “We have to talk about public media — public media probably has to get its act together somewhat, too. It’s not everything that Lyndon Johnson had in mind back in 1967 [when the Public Broadcasting Act was signed], but it’s still the jewel of our media ecosystem. So I’m more worried than ever about the state of our media — not just fake news but the lack of real news.”

Exposing what is really going on in Washington these days requires reporting beyond the latest misstep or tweet from the president, says Copps. For him, it’s the pervasive influence of corporate cash that really matters.

“I think there is that right-wing, pro-business, invisible hand ideology, and then there’s just the unabashed and unprecedented and disgusting level of money in politics,” Copps said. “I don’t blame just the Republicans; the Democrats are just about as beholden to it, too.”

Pai is a True Believer

Copps believes Pai is a true believer of an ideology that regulations do more harm than good.

“He has this Weltanschauung [world view] or whatever you want to call it that is so out of step with modern politics and where we should be in the history of this country that it’s potentially extremely destructive,” Copps said. “And Michael O’Rielly, the other Republican commissioner, is about the same. He’s an ideologue, too.”

“The problem is that Republicans inside the Beltway are joined in lockstep opposition on almost all these issues, and the level of partisanship, lobbying, big money, and ideology have thus far been insurmountable obstacles,” said Copps. “But I believe if members of Congress spent more time at home, holding more town hall meetings, they would quickly learn that many, many of their constituents are on the pro-consumer, pro-citizen side of these issues.”

Copps is worried that prior mergers set precedents for even larger ones, and the ongoing consolidation of the media and telecom industry is only going to get worse under the Trump Administration.

“I don’t know how long you can let this go on. How long can you open the bazaar to all this consolidation, how much can you encourage all this commercialization, how much can you ignore public media until you get to the point of no return where you can’t really fix it anymore,” Copps asked. “And I also think that the national discourse on the future of the internet has really suffered while we play ping pong with Net Neutrality; one group comes in, does this, the other group, comes in and reverses it, boom, boom, boom. And Net Neutrality is not the salvation or the solution to all of the problems of the internet. As you know, it’s kind of the opening thing you have to have, it lays a foundation where we can build a truly open internet.”

“It’s all about the ideology, the world of big money, the access that the big guys have and continue to have,” Copps concluded. “It’s not that the FCC outright refuses to let public interest groups through the door or anything like that; it’s just the lack of resources citizens and public interest groups have compared to what the big guys have. The public interest groups don’t have much of a chance, but I think they’ve done a pretty good job given the lack of resources.”

What Should the Public Do?

“Figure out how you really make this a grass-roots effort — and not just people writing, in but people doing more than that,” Copps advised. “In July, we will have a day devoted to internet action, so stay tuned on that. In addition, as Bill Moyers says, ‘If you can sing, sing. If you can write a poem, write a poem.’ Different initiatives attract different audiences, so whatever you can do, do. John Oliver made a huge difference in getting us to Net Neutrality and now he’s helping again. If you went up to the Hill right after that first John Oliver show on Net Neutrality [in 2014], you saw immediately that it made a difference with the members and the staff. There’s no one silver bullet, no “do this” and it suddenly happens. You just have to do whatever you can do to get people excited and organized. It’s as simple as that.”

Wall Street wants a deal between T-Mobile and Sprint rich with fees and “synergies,” but nobody counting the money cares whether consumers will actually get better service or lower prices as a result of another wireless industry merger.

Recently, more players have entered the T-Mo/Sprint Drum Circle, seeming in favor of the merger of America’s third and fourth largest wireless carriers. Moody’s Investor Service wouldn’t go as far as Sprint CEO Marcelo Claure in playing up the deal’s “synergy savings” won from cutting duplicate costs (especially jobs) after the merger, but was willing to say the combination of the two companies could cut their combined costs by $3 billion or more annually. Based on earlier mergers, most savings would come from eliminating redundant cell sites, winning better volume pricing on handsets, dramatic cuts in employees and back office operations, and spectrum sharing.

“Imagine if you had a supercharged maverick now going after AT&T and Verizon to stop this duopoly,” Claure told an audience in Miami.

Wells Fargo called Sprint’s large spectrum holdings in the 2.5GHz band undervalued, and could be an important part of any transaction.

Sprint has more high-band spectrum than any other carrier in the U.S. Much maligned for its inability to penetrate well indoors and for its reduced coverage area, most carriers have not prioritized use of these frequencies. But forthcoming 5G networks, likely to offer a wireless alternative to wired home broadband, will dominate high frequency spectrum, leaving Sprint in excellent condition to participate in the 5G splash yet to come.

Wall Street banks can expect a small fortune in fees advising both companies on a merger deal and to assist in arranging its financing. Any deal will likely be worth more than the $39 billion AT&T was willing to pay for T-Mobile back in 2011. With that kind of money at stake, any merger announcement will likely be followed by millions in spending to lobby for its approval. Washington regulators ultimately rejected AT&T’s 2011 buyout, arguing it was anti-competitive. Reducing the U.S. marketplace to three national cellular networks is likely to again raise concerns that reduced competition will lead to higher prices.

A merger is also likely to be disruptive to customers, particularly because Sprint and T-Mobile run very different operations and systems. Moody’s predicted it could take up to five years for any merger to fully consummate, giving AT&T and Verizon considerable lead time to bolster their networks and offerings. Moody’s notes Sprint also has a history with bad merger deals, notably its acquisition of Nextel, which proved to be a distracting nightmare.

“If [another merger] stalls or is derailed by operational missteps, the downside is catastrophic,” Moody’s noted.