The merger of T-Mobile and Sprint would never have been approved by the Justice Department had Charles Ergen not promised to launch a new nationwide wireless competitor to protect competition. But now Ergen may be wavering over his commitment.

The founder of satellite TV company Dish Network had promised to spend nearly $10 billion to build a new 5G network capable of reaching 70 percent of the population by June 2023 as part of negotiations between T-Mobile, Sprint, and the federal government. But with the coronavirus pandemic shutting down the U.S. economy, the New York Post reports the company will have a difficult time finding the money to build that network.

“I think whatever rosy projections Charlie had are now very questionable,” said a source who expected to be part Dish’s lending group. “There is no financing to build a telecom network.”

Oddly, Ergen predicted just such a scenario in December when he testified to Dish’s ability to replace Sprint. In order to prove he was fit for the job, the 67-year-old media mogul showed off letters from three banks — Deutsche Bank, JPMorgan and Morgan Stanley — saying they would gladly fund his expensive network construction.

“Where the markets are today — if we don’t have another 9-11, God forbid — the banks are confident,” Ergen told the packed courtroom.

That testimony helped convince Manhattan federal judge Victor Marrero to approve T-Mobile’s $26 billion acquisition of Sprint, despite calls by a group of attorneys general, including Letitia James of New York, to block the deal, which they said would reduce competition and increase prices for consumers.

Ergen’s commitment to build a new fourth national wireless carrier was crucial for T-Mobile and Sprint to win regulatory approval of their $26 billion merger, which will reduce the number of national wireless competitors to three. That merger secretly received help from the country’s chief antitrust enforcer, Makan Delrahim. The Trump-appointed regulator, who serves as the head of the Justice Department’s antitrust division, exchanged numerous text messages between himself and top executives of Sprint, T-Mobile, and Dish to help salvage a merger deal under heavy criticism from Democrats and consumer advocates. Delrahim signaled his approval of the merger if Dish promised to buy Sprint’s prepaid wireless brand Boost and was offered access to T-Mobile’s wireless network to help launch Dish Wireless as a new competitor. But executives from Sprint and T-Mobile repeatedly quarreled over the details of the merger with Ergen, forcing Delrahim to intervene and bring the parties together to smooth things over.

Several consumer advocates and state attorneys general questioned the merger and Ergen’s commitment and capacity to serve as a new competitor. Ergen has warehoused wireless spectrum for years and has yet to meaningfully deploy it, deal critics contend. Additionally, Dish Wireless will be unlikely to achieve the scale and size of Sprint, the wireless carrier absorbed by the merger. That could mean it would be unable to deter anti-competitive behavior by the three larger companies — AT&T, Verizon, and the New T-Mobile. The most skeptical suggest Ergen has no intention of constructing a network for Dish Wireless. Instead, they contend he quietly intends to sell the wireless operation and potentially sweeten the deal by including Dish’s satellite TV business, its existing portfolio of unused wireless spectrum, or both.

If Ergen cannot meet the 2023 deadline, regulators could fine his company $2 billion and force it to relinquish the $12 billion worth of wireless spectrum Dish Network has been warehousing for years.

To succeed, Ergen will need Wall Street banks to cooperate and continue extending Dish Wireless credit. He will also need to find capable engineers ready to place 5G infrastructure on thousands of cell towers at the same time other wireless providers are building 5G networks of their own. None of this will be possible until the coronavirus crisis abates and the economy recovers. Despite this, some analysts are willing to still give Ergen the benefit of the doubt.

“Two months of severe market uncertainty doesn’t really alter my view of a company to execute on a three-year plan,” Lightshed Partners Analyst Walt Piecyk told The Post, saying it is too soon to question if Ergen will meet the deadline.

Ergen may also be able to convince regulators to approve a delay, pushing out the deadline. Assuming Ergen closes the deal to acquire Boost Mobile, which currently relies on Sprint’s 4G network to service its prepaid wireless customers, Boost will likely be rechristened Dish Wireless and serve as Ergen’s contribution to a competitive wireless industry until his own network gets off the ground.

(Image: Science Blogs)

A preacher in the United Kingdom told parishioners that the cell tower erected within sight of his church was transmitting 5G “murder vibrations” directly responsible for the country’s outbreak of the COVID-19 coronavirus. A Nigerian pastor told viewers the central government locked down two major cities in the country to secretly install 5G cell towers and warned other lock downs were coming soon to allow cell phone companies to install more towers. Woo incubator “Goop” has hatched more than a few 5G conspiracy theories, including contributor Habib Sadeghi’s claim that every pandemic over the last two centuries is directly caused by the “electrification of earth.” Singer M.I.A. suggests recovery from COVID-19 is being hampered by 5G radio waves which “confuse or slow the body down in healing process as body is learning to cope with new signals, wavelengths, frequencies, etc.” As the coronavirus crisis deepened across the United Kingdom, M.I.A. blasted the government for not forcing 5G services to shut down, pointing out she is not feeling well and “my symptoms match the 5G symptoms.”

For more than a year, conspiracy theories about the health effects of 5G wireless networks have grown. RT, the Russian state broadcaster, even called it the “5G Apocalypse.” On the other side of the political spectrum, conspiracy group Q-Anon, which believes entrenched politicians are conspiring within the “deep state” to sabotage the presidency of Donald Trump, claims 5G is a vital tool to lull people into complacency with mind control.

A Q-Anon supporter:

I am in disbelief that these people would risk extinction of the human race for a buck. But remember these people are evil. The power of 5G is scary. It will give them the ability to control all AI they will literally dictate your life, what MEDIA you are exposed to your privacy your health everything. But is 5G worth so much that someone would be willing to murder someone for it. How about hundreds. We know the Evil behind 911 possible to cover up the 200 trillion dollar military fraud meeting at the pentagon #Qanon #TheGreatAwakening @40_head

In reality, 5G is nothing more than an overhyped wireless technology upgrade that can either be slightly faster than existing 4G LTE networks, or considerably faster if adequate wireless spectrum is available for short distance communications. In either case, the energy emitted by traditional cell towers or small cells is infinitesimal compared to much stronger local TV and radio stations. In fact, the fastest 5G networks operate on millimeter wave frequencies that cannot penetrate walls and doors and are capable of reaching only a few blocks away at most.

As people shelter in their homes to avoid spreading the virus, newly available free time apparently triggered a few believers of 5G conspiracy theories. An unknown number took to the streets last weekend to set several cell towers in the United Kingdom on fire.

This is the consequence of those bonkers Facebook conspiracy theories about 5G. Key workers getting harassed on the street. pic.twitter.com/5z35r6sabp

— Charlie Haynes (@charliehtweets) April 2, 2020

CNBC reports four Vodafone cell towers were attacked over the weekend, with a video widely circulated on the internet showing another cell tower owned by EE damaged by fire in Birmingham.

“This site served thousands of people in the Birmingham area, providing vital 2G, 3G and 4G connectivity as it has done for many years,” an EE spokesperson told CNBC. “We will try to restore full coverage as quickly as possible, but the damage caused by the fire is significant.”

London radio station LBC talks with a representative from FullFact, a non-profit independent fact-checker, to debunk claims that 5G signals are helping spread the coronavirus. (23:47)

(Reuters) – T-Mobile US Inc is preparing an alternative plan if a deal to sell wireless assets to Dish Network Corp falls through, according to two sources familiar with the matter.

Investment bank Goldman Sachs Group Inc., which is advising T-Mobile, the third largest U.S. wireless carrier, on selling prepaid brand Boost Mobile as part of the company’s concession to gain regulatory approval to buy Sprint Corp, is expected to send out books to prospective buyers in two weeks, one source familiar with the matter said.

While satellite television provider Dish Network remains the front-runner to acquire the Boost assets, Goldman has told prospective buyers as late as Tuesday that it is preparing for an upcoming auction of Boost.

Another source characterized the process being run by Goldman as moving slowly. Among the details holding up an auction is that Goldman is not yet clear what exactly is up for sale from the merger, one source said.

T-Mobile and Sprint did not immediately respond to requests for comment. Goldman Sachs declined to comment.

T-Mobile and Sprint have agreed to a series of deal concessions, including to sell Boost, to gain regulatory approval for the $26.5 billion merger with Sprint, but still needs the green light from the U.S. Department of Justice antitrust chief, though his staff have recommended the agency block the deal.

A source close to the discussions said T-Mobile was hopeful it would reach an agreement with the Justice Department by early next week.

The Boost assets have stirred up interest from a variety of parties, including Amazon.com and cable companies Comcast, Charter Communications, and Altice USA, according to sources.

T-Mobile and Sprint are still negotiating possible additional concessions with the Department of Justice, and Goldman Sachs is waiting for the details of the agreement before working on the terms that will be sent out to bidders, one source said.

Two potential bidders told Reuters on the condition of anonymity that they are still in the dark about critical information related to the Boost sale, such as how the Boost wireless deal with T-Mobile will be structured, or financial details about the Boost customers, which the bidders will use to determine the prepaid brand’s valuation.

Dish is also speaking with other parties on potential partnerships with Boost, sources said.

T-Mobile has agreed to negotiate a contract with Boost’s buyer that will allow the spun-off company to run on the combined T-Mobile and Sprint network, according to a regulatory filing that outlined the merger concessions. But the carriers are currently debating whether to provide the buyer an infrastructure-based mobile virtual network operator deal, which would allow the buyer more control over the wireless plans, including control of the user’s SIM card, one source said.

That could help convince the Department of Justice to approve the merger, which has held discussions on how to preserve competition in the wireless industry.

Cable provider Altice is one of the few so-called MVNO partners to have this type of wireless agreement, which it currently has with Sprint. An infrastructure-based MVNO is generally seen as more favorable than a standard deal that allows wireless providers that do not own and operate their own network to piggyback off of one of the four major wireless carriers for wholesale prices.

Other concessions being discussed include whether T-Mobile and Sprint will divest wireless spectrum, or the airwaves that carry data, and the possibility of giving up more retail customers or retail shops from either T-Mobile or Sprint’s prepaid brands, according to one source familiar with the matter.

Reporting by Sheila Dang and Angela Moon in New York and Diane Bartz in Washington; Editing by Kenneth Li and Lisa Shumaker

Dish Network Corporation is in the final stages of talks to acquire assets that include valuable wireless spectrum and Sprint’s Boost Mobile brand for an estimated $6 billion, according to a report quoting anonymous sources published by Bloomberg News, clearing the way for the Department of Justice to approve the merger of T-Mobile and Sprint.

Dish could announce a deal as soon as this week, but sources caution the talks are still ongoing and a deal might still fall apart. A spinoff of Boost is reportedly essential for the Antitrust Division at the DoJ to approve the merger, because the regulator reportedly wants to preserve four national wireless carriers to protect wireless competition in the United States.

Dish has already warehoused extensive wireless spectrum, much of it potentially valuable for the future deployment of 5G wireless networks, but Dish has historically held its spectrum without launching any significant wireless operations. If Dish does acquire Boost, the deal will come with a pre-existing contract allowing the prepaid Mobile Virtual Network Operator (MVNO) to continue to use Sprint’s network to service its customers. Dish would also receive a portion of spectrum held by T-Mobile and/or Sprint with which it could build its own wireless network, but that would require billions in new investments from a satellite TV provider already under financial stress from the impact of cord-cutting.

At worst, the transaction could allow Dish to increase its spectrum holdings while running Boost’s existing prepaid wireless operation as-is, dependent entirely on Sprint for connectivity. If the merger is successful, T-Mobile plans to mothball a significant portion of Sprint’s CDMA wireless network, which could eventually force Boost to find a new host for its wireless services.

Wall Street analyst MoffettNathanson remains skeptical about the T-Mobile/Sprint merger and is even more puzzled by Dish’s reported involvement. The analyst firm released a research note to its clients warning the future of Boost may be bleak:

We’re not sure why that deal is sensible for anyone involved. Dish, remember, already has more spectrum than they know what to do with; what they lack is money and ground facilities, and the deal described on Friday wouldn’t deliver either one. Instead, it would make both problems worse. And while Boost would help provide a baseline revenue stream in return for an upfront purchase price, the fit between Boost and Dish is, at best, superficial. Yes Boost serves a budget conscious consumer, as does Dish Network’s satellite business, but Boost is a mostly urban brand and Dish’s satellite business is an increasingly rural one.

And, more urgently, Boost’s distribution poses a huge problem. Historically, Boost was heavily dependent on Walmart for retail gross additions, but they’ve since lost that distribution channel. They would also, presumably, lose distribution through Sprint-branded stores (and even if, as a condition of the deal, they didn’t, does anyone think that Sprint/T-Mobile store employees would direct any volume to a spun off Boost brand?) That would leave Dish with the brand that has a churn rate as high as 5% per month to be spun off with an inadequate distribution front end, and with no realistic path to replace that front end before the subscriber base was, well, gone.

BTIG’s Walter Piecyk appeared on CNBC Monday to warn investors they are being too optimistic about the T-Mobile/Sprint merger’s chances of being approved. He puts those chances at “less than 50-50.” (5:38)

In contrast, Dade Hayes, contributing editor at Deadline, believes the deal will ultimately win approval from the Department of Justice. He talks to Cheddar about what T-Mobile and Sprint are doing to win over regulators. (8:14)

Charter Spectrum’s broadband-only customers run up more than double the amount of broadband usage average customers subscribing to both cable TV and broadband use, and that consumption is growing fast.

“Data usage by residential internet customers is rising rapidly and monthly median data usage is over 200 GB per customer,” Charter CEO Thomas Rutledge said on a morning quarterly results conference call. “When you look at average monthly usage for customers that don’t subscribe to our traditional video product, usage climbs to over 400 GB per month.”

Last week, Comcast reported its average broadband customer also used over 200 GB a month, but did not break out the difference between those subscribing to cable TV and those who do not. If Comcast’s broadband-only customers are consuming a comparable amount of data, they could be nearing half of their monthly usage allowance (1 TB), in markets where Comcast caps its customers’ usage. But because that is only an average, it means many more Comcast customers are likely nearing or now exceeding Comcast’s data cap, exposing them to hefty overlimit penalties.

Spectrum does not impose any data allowances on its customers — all usage is unlimited.

Charter officials also reported their average mobile customers use “well under 10 GB a month.” The fact Charter did not get more specific about mobile usage is important because the new product is getting scrutiny from some on Wall Street concerned it will have a hard time becoming profitable because of its wholesale agreement with Verizon Wireless, which provides the 4G LTE service for Spectrum Mobile.

Subscribers have been primarily drawn to the $14/GB plan, which includes unlimited talk and texting, because it offers a very low entry price for a full-function wireless plan. But a customer only needs to use more than 3 GB of service per month to find their bill higher than what they would pay subscribing to Spectrum Mobile’s $45 unlimited usage plan. If Charter executives said the average mobile user consumed 5 GB of data, analysts could deduce what the average customer bill probably looked like. To maximize profits, Charter needs customers to select an unlimited data plan and keep data usage low to assure it can cover the wholesale costs Verizon Wireless charges the cable company for wireless connectivity.

Rutledge

Rutledge stressed he expects Spectrum Mobile to be profitable with the current Verizon Wireless MVNO contract in place — the service simply needs a larger user base to overcome its current losses.

Rutledge also announced Spectrum Mobile was testing dual SIM technology, which could allow it to eventually offload more of its 4G LTE traffic to its own (cheaper) network, which could eventually include mid-band wireless spectrum and the CBRS spectrum the company is already testing for fixed wireless service for rural areas. Spectrum could also follow Comcast with its own in-home network of publicly available Wi-Fi or innovate with unlicensed wireless mobile spectrum using small cells or external antennas.

Charter executives noted that customer data demands were pushing many to upgrade to higher speed internet products.

“Over 80% of our internet customers are now in packages that deliver 100 Mbps of speed or more and 30% of our customers are getting 200 Mbps or more,” Rutledge said. “We’re also seeing strong demand for our Ultra product, which delivers 400 Mbps, and we have gigabit service available everywhere.”

The costs to continue upgrading service for broadband customers are negligible on the company’s current platform, Rutledge admits. In the future, Charter Spectrum is considering offering 10 Gbps and 25 Gbps symmetrical service to customers, and it can scale up upgrades very quickly.

“For example, in only 14 months we launched DOCSIS 3.1, which took our speeds up to 1 Gbps across our entire footprint at a cost of just $9 per passing,” Rutledge said.