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.

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.”

Altice USA today revealed the terms of its long-expected initial public offering likely to bring more than a billion dollars to the company’s merger and acquisition fund that many Wall Street analysts now expect will be spent to acquire privately held Cox Communications and/or Mediacom.

Cox has long claimed it is not for sale. But Altice founder Patrick Drahi has a history of being willing to overpay for the companies he covets, including Cablevision, which was a reluctant seller for at least a decade before Altice made an offer the Dolan family that founded Cablevision couldn’t refuse.

Telsey Group analyst Tom Eagan told his Wall Street clients he expected Altice would be “active” in American cable consolidation, with Cox and Mediacom systems being likely targets. Other analysts have downplayed potential interest in Cable ONE, another likely target, because of the company’s recent aggressive rate increases and the fact its systems are often in economically depressed areas. An acquisition of Cox and/or Mediacom would make Altice the third largest cable company in the country, but it would still be far behind Comcast and Charter Communications, which hold first and second place respectively.

Any acquisition would likely not get much scrutiny on the federal level by the FCC and Justice Department, and most states would likely give the deal only a perfunctory review before approving it.

Altice USA has applied to be listed as “ATUS” on the New York Stock Exchange.

In one of the largest media consolidation acquisitions in history, Sinclair Broadcast Group has agreed to buy Tribune Media and its 42 TV stations in a $3.9 billion deal.

The transaction, expected to win easy approval by the Republican-dominated Federal Communications Commission, will virtually guarantee cable and satellite TV subscribers will pay significantly higher prices to watch Sinclair’s local television stations covering more than 70% of the United States.

Sinclair helped lay the foundation for winning approval of the transaction in GOP-dominated D.C. by hiring former Trump spokesman Boris Epshteyn as Sinclair’s chief political analyst, and Sinclair executives mandate that many of its owned stations air pro-Trump conservative political content labeled as “news stories” as part of local newscasts.

Sinclair’s conservative leanings and accusations of hypocrisy are nothing new for the station group, which has been mired in controversy for more than two decades. The “family values” image that Sinclair purports to have in its political commentaries and corporate image ran headlong into the 1996 arrest of its former CEO David Smith, who used the company Mercedes to pick up hookers in Baltimore. He was convicted of a misdemeanor sex offense. Smith cut a deal with a Maryland state’s attorney that would allow him to avoid picking up trash on the highway or cleaning community-owned pools by having his reporters air stories about Baltimore’s drug court instead.

LuAnne Canipe, a reporter who worked on air at Sinclair’s flagship station, WBFF in Baltimore, from 1994 to 1998, told Salon in 2004 she took a phone call one day about the disposition of Smith’s arrest.

“A Baltimore judge called me up,” she recalls. “He wasn’t handling the case, but he called to tell me about the arrangement and asked me if I knew about it. The judge was outraged. He said, ‘How can employees do community service for their boss?’”

To this day, Smith remains the chairman of Sinclair Broadcast Group, although he relinquished the CEO position last fall.

Canipe said the sexual shenanigans at Sinclair didn’t stop with the CEO either.

“Let’s just say the arrest of the CEO was part of a sexual atmosphere that trickled down to different levels in the company,” Canipe remembered. “There was an improper work environment. I think that because of what he did there was a feeling that everything was fair game.”

Before leaving Sinclair in 1998, she said she once complained to management about another Sinclair employee, who had engaged in audible phone sex inside a station conference room, but that no action was taken against the employee. Canipe passed away in 2016 after battling cancer.

Sinclair stations were required to air political commentary during local newscasts that favored the Bush Administration.

By 2004, the majority of Sinclair’s then-62 stations were living with corporate interference in the local newsroom. Sinclair mandates that most of their owned stations air corporate-produced political segments that are routinely called “to the [political] right of Fox News” by detractors. That year, many local newsrooms at Sinclair stations bristled over the mandatory airing of a daily televised commentary called The Point, hosted by Mark Hyman, then Sinclair’s vice president for corporate relations. The Point could be compared as Sean Hannity’s talking points delivered with the bombastic panache of Bill O’Reilly. As the 2004 election neared, Hyman’s push for George W. Bush’s re-election went into overdrive. Hyman was a fierce advocate for the Bush Administration’s intervention in Iraq and referred to the French critics of President Bush’s war strategy as “cheese-eating surrender monkeys.”

While Hyman force-fed conservative political commentaries to Sinclair stations, he did not extend that same right to others, banning Sinclair’s ABC-affiliated stations from airing an edition of Nightline that showed host Ted Koppel reading the names of U.S. troops killed in Iraq, claiming the idea was inappropriate and “motivated by a political agenda.” Concerns about political agendas were short-lived, however, because Hyman later mandated that 40 of Sinclair’s 62 stations air “Stolen Honor,” a much-criticized and highly controversial political documentary attacking Democratic presidential candidate Sen. John Kerry’s war record. The stations aired a revised version of the documentary days before the 2004 presidential election.

When management at some of Sinclair’s local stations balked at the required airing, Hyman accused them of “acting like Holocaust deniers.”

Just prior to the 2012 election, WSYX was forced to air a Sinclair-produced “special” pre-empting ABC’s 6:30pm national news and Nightline that heavily criticized President Obama, then up for re-election, and accused him of lying about the attack on the American consulate in Benghazi, Libya. The special also pre-empted programming on other Sinclair stations, including WPEC in West Palm Beach.

The implied quid pro quo with the Bush Administration was particularly important for Sinclair as it continued acquiring TV stations, a process that required the approval of the then-Republican controlled FCC. A 2004 Salon article quoted journalist Paul Alexander, who produced a widely acclaimed documentary about Kerry as “insulting to the news-gathering process. That’s not how you gather news; that’s how you blackmail people.”

But news gathering was never the point, according to former Sinclair reporter Canipe. “David Smith doesn’t care about journalism,” she said.

Smith doubled-down on his cozy relationship with the Bush Administration by allowing conservative commentator Armstrong Williams to produce unfettered extended media segments for Sinclair stations. What Smith claims he did not know was that Williams accepted a $240,000 payoff from Bush officials to promote the Administration’s education agenda in the media. Williams brazenly interviewed then Education Secretary Rod Paige, the same man who authorized Williams’ payoff.

The result of the interview, according to the 2005 Rolling Stone piece:

Even before the payoffs became public, the news staff at Sinclair was horrified. The producer who edited the interview Williams did with Paige calls it “the worst piece of TV I’ve ever been associated with. You’ve seen softballs from Larry King? Well, this was softer. I told my boss it didn’t even deserve to be broadcast, but they kept pushing me to put more of it on tape. In retrospect, it was so clearly propaganda.”

When things became politically difficult for the president during the second term of the Bush Administration, Sinclair again came to the rescue, forcing its stations to air headquarter-produced news stories highlighting “good news” about the war in Iraq. Sinclair executives also demanded each of its 62 stations air a pledge of support for President Bush.

Rolling Stone:

But within the company, current and former employees have long known that there is a fine line between ideology and coercion. Jon Leiberman, once Sinclair’s Washington bureau chief, says Smith and other executives were intent on airing “propaganda meant to sway the election.” An ex-producer says he was ordered not to report “any bad news out of Iraq — no dead servicemen, no reports on how much we’re spending, nothing.” And a producer Sinclair sent to Iraq to report on the war calls the resulting coverage “pro-Bush.”

“You weren’t reporting news,” says the producer, who spoke on the condition of anonymity. “You were reporting a political agenda that came down to you from the top of the food chain.”

At the time, Smith told visitors to his Baltimore headquarters: “There are two companies doing truly balanced news today: Sinclair and Fox.”

During the most recent election cycle, Sinclair executives made sure audiences knew where they stood, urging voters to reject Hillary Clinton, as the New York Times reported, “because the Democratic Party was historically pro-slavery.”

More recently, Sinclair has defended the Trump Administration, with orders from Sinclair HQ to stations to dig up information about an online ad that seemed to recruit paid protesters for President Trump’s inauguration in January. Various right-wing groups used the ad as evidence of organized efforts to harass the incoming administration. The ad was later determined to be a hoax, wasting reporters’ time.

The national map of Sinclair and Tribune Media’s reach. (Image: New York Times)

The interference in local newsgathering by Sinclair executives has become so pervasive, its station in Seattle – KOMO, has been rebelling by burying mandated stories surrounding commercial breaks, when viewers are most likely to tune them out. But there is little else the station can do, and like with other acquisitions Sinclair has completed, there are fewer news staffers at KOMO to protest. Standard procedure at Sinclair after an acquisition to is dramatically cut back on employees and offer more stories and content produced at Sinclair’s headquarters or at other Sinclair-owned stations.

Sinclair’s latest target — Tribune Media, owns stations familiar to most cable and satellite subscribers around the country. Among the stations in Tribune’s portfolio — WPIX-New York, WPHL-Philadelphia, WGN-TV/WGN America-Chicago, KDVR/KWGN-Denver, and KTLA-Los Angeles.

“It’s an incredible amount of power in one company’s hands,” said Craig Aaron, president of Free Press.

Tribune Media owns some of the largest local TV stations in the country.

Former FCC commissioner Michael Copps doesn’t much like the deal either, noting it is “another blow to the diversity of journalism that we should have. It’s symptomatic of what is happening in this market, which is fewer and fewer organizations controlling more and more of the information on which our democracy rests.”

Copps

With all the recent turmoil at Fox News Channel, including the cancellation of Bill O’Reilly’s show, Sinclair could use its Tribune Media acquisition to launch a new conservative national news and opinion network that could rival Fox. WGN America, which no longer has anything to do with WGN-TV — a former “superstation”, could dump the current reruns it airs and be repurposed as a new home for exiled conservative commentators like O’Reilly.

Regardless of your political persuasion, you will likely be paying a lot more for Sinclair TV stations on the cable or satellite dial. Sinclair is among the most aggressive station owners boosting prices for carriage agreements. Cable operators will continue to pass most, if not all of these fees on to subscribers in the form of higher rates or through “Broadcast TV” surcharges that are rarely mentioned by cable companies in their advertised rates.

In Utah, cable operators are already very familiar with Sinclair’s retransmission rate increases. The revenue has grown so significant, some station owner groups are buying up small independent TV stations just to cash in on the growing revenue they get from cable systems and subscribers.

CentraCom, a cable operator in Utah, reports it now pays over $10 as month for local stations, per subscriber, double what it paid in 2008, and they are prepared to see rates much higher than that in the future. Sinclair will also be motivated to force bundle its cable network Tennis Channel with its local stations when it negotiates with cable companies, whether they want the tennis network or not.