Ericsson sets aside $1.2 billion in preparation for corruption fine

Since 2013, Ericsson has been the focus of two investigations concerning the Swedish vendors compliance with the US Foreign Corrupt Practices Act (FCPA), and now it is preparing for the fine.

The investigation officially ended in the fourth quarter of 2017, though Ericsson has been in a continued dialogue with the Securities and Exchange Commission (SEC) and the Department of Justice (DoJ) since. With the team found to have broken the law in six markets, Ericsson is expected the combined fines to be north of $1 billion. Today’s announcement is to prepare investors for the hit.

“With today’s announcement we confront another legacy issue and take the next step in resolving it,” said Ericsson CEO Börje Ekholm.

“We have to recognize that the Company has failed in the past and I can assure you that we work hard every day to build a stronger Ericsson, where ethics and compliance are cornerstones in how we conduct business. Over the past two years, we have made significant investments in our ethics and compliance program including our investigative capabilities and have taken actions against employees who have transgressed our values and standards.”

Corrections have been made to internal procedures in the six years since the probes begun, though it casts a dark shadow on the vendor. Corruption allegations are never favourable, irrelevant as to how far in the past they were.

Starting in 2013, the SEC launched a probe with the DoJ joining the party in 2015. The investigations covered a four-year period, ending in 2017, relating to bribes which were offered to Government officials. Ericsson was found to be non-compliant with the FCPA in six markets; China, Djibouti, Indonesia, Kuwait, Saudi Arabia, and Vietnam.

Like every other law, there are hundreds of provisions and clauses to the FCPA, though there are two which it is most readily known for. Firstly, rules dictating accounting transparency requirements under the Securities Exchange Act of 1934, and secondly, concerning bribery of foreign officials.

In short, the rules state it is unlawful to provide anything of material value to government officials to obtain or retain business. On the accountancy transparency side, these rules are to ensure there is an effective compliance and accountability system to internally prevent illegal activity.

Although Ericsson has been co-operative with the agencies during the investigation, the $1 billion fine might only be part of the problem. The Ericsson management team has pointed to additional risks associated with this saga, including reputational damage. The team will have been working hard to smooth over the cracks, however the official fine might well encourage other parties to have a closer look at the relationships in place.

US DoJ has found another Chinese target

The US Department of Justice is reportedly on the verge of putting the brakes on a Google and Facebook funded Pacific subsea cable over national security concerns over a Chinese partner.

According to the Wall Street Journal, the distrust between Washington and Beijing is on the verge of spreading to another company with links to the Chinese Government. The cable will be roughly 8,000 miles long, connecting Los Angeles with Hong Kong, with an initial estimated design capacity of 120 Tbps. It has been plugged as the longest and one of the fastest worldwide.

The objective of this subsea cable is to provide more diversity and resiliency across the Pacific. Most cables across the Atlantic land in Japan, though by taking a more direct route, theoretically better performance can be realised.

In itself, this all sounds reasonable, especially if companies like Google and Facebook want to increase their presence in the region, but this isn’t what officials have issue with. It is a Chinese company called Dr Peng Telecommunication and Media Group.

Cable Network

For those who aren’t familiar with Dr Peng, this company is one of the major players in the Chinese connectivity market. In years gone, Dr Peng used to be the market leader in the broadband space, though as the state-owned entities diversified into fixed line, margins and market share was squeezed. Today, Dr Peng, China Mobile, China Unicom and China Telecom control more than 90% of the broadband market.

With the three well-known CSPs putting more pressure on the broadband market, Dr Peng has looked to get out of the segment and diversify into new areas. This includes offering connectivity and customer care services to other telcos, it currently owns 15 data centres across China, and also, investments in subsea cables.

This is where the Department of Justice is finding issue with the trans-Pacific subsea cable. Like Huawei, Dr Peng’s ties to the Chinese Government has been deemed too close. The DoJ is citing national security concerns as the reason to put the brakes on deployment.

The deployment of this cable is currently being undertaken by Pacific Light Data Communication (PLDC), a wholly owned by Dr Peng Holding Hong Kong Limited and China Culture Silicon Valley Limited. PLDC is partnering Google and Facebook for investment in this subsea cable.

Once again, collateral damage to US firms has been ignored in the pursuit of national security. It is also perhaps another indication of the animosity between Washington and Silicon Valley. The occupant of the White House is not exactly on the friendliest of terms with the residents of Mountain View, so it should hardly come as a surprise this was not much of a consideration.

For Google and Facebook, this is unlikely to be welcome news. Offering better connections between the US and South East Asia presents significant opportunities to grow exposure and revenues in some fast-growing markets, such as Philippines, Malaysia or Indonesia. If the US firms do not capitalise, someone else will.

It seems that if this cable is to continue on its path, the parties involved would have to prove there is no way the Chinese Government could monitor, alter or stop internet traffic which would flow through it. Proving this resilience and security is going to be a very difficult task.

Another element to consider is the impact to the on-going conflict between Washington and Beijing. The Chinese Government has taken exception to US aggression against Huawei, and it is unlikely to be thrilled about another Chinese company being scrutinised in such a manner as it prevents it doing business.

For those who might have hoped an end to the trade-war might be in sight, the US Department of Justice might be about to add some more fuel to the flames.

FTC Chair kicks off race to tackle big tech before it’s too late

A race seems to be heating up in the US. On one side, government officials are looking to tackle the influence of big tech, and on the other, Silicon Valley is trying to make it as difficult as possible.

Speaking to the Financial Times, Chairman of the FTC Joseph Simons has stated he believes efforts from Facebook CEO Mark Zuckerberg to more intrinsically integrate the different platforms could seriously complicate his own investigation. Back in July, it was unveiled the FTC was conducting a probe to understand whether competition has been negatively impacted by the social media giant.

However, Facebook has gone on the offensive and Simons is clearly not thrilled about it.

“If they’re maintaining separate business structures and infrastructure, it’s much easier to have a divestiture in that circumstance than in where they’re completely enmeshed, and all the eggs are scrambled,” said Simons.

This is the issue which the FTC is facing; Facebook is more closely integrating the separate brands. From a commercial perspective, this will allow the social media giant to cross-pollinate the platforms, potentially increasing revenues and enhancing the data-analytics machine, though it will also make divestments much more difficult to enforce.

Looking across the big names in Silicon Valley, this is a common business practice. The commercial benefits are of course very obvious, but it could be viewed as a defensive strategy in preparation for any snooping from government agencies.

At Google, with the benefit of hindsight, some regulators and politicians might have wanted to have block the acquisitions of Android, YouTube or artificial intelligence firm DeepMind. These acquisitions have led Google to become one of the most influential companies on the planet, though it does appear regulators at the time did not have the vision to understand the long-term impact. Now the services are so deeply embedded and inter-twined it is perhaps unfeasible to consider divestments.

Amazon is another company some of these politicians would love to tackle, but how do you go about breaking-up such a complex business, where the moving parts are becoming increasingly reliant on each-other?

Going back almost two decades, this is not the first-time regulators have attempted to tackle an overly influential player. Thanks to dominance in the PC arena, Microsoft was deemed to be negatively influencing competition when it came to software and applications. Despite Microsoft being forced to settle the case with the Department of Justice in 2001, the concessions stopped far short of a company break-up.

As part of the settlement, Microsoft agreed to make it easier competitors to get their software more closely integrated with the Windows OS, by breaking the company into two separate units, one to produce the operating system, and one to produce other software components. This was a tough pill for Microsoft to swallow, but it was a favourable outcome for the internet giant.

One view on this outcome is that Microsoft managed to structure its business in such a way it became almost impossible to split-up. If the technology giants of today can learn some lessons from Microsoft, they might well be able to circumnavigate any aggression from the US government.

Although the FTC is stealing the headlines here, it is not the only party looking to tackle the influence of Silicon Valley.

The House Judiciary Committee’s subcommittee that deals with antitrust has already summoned Apple, Amazon, Facebook and Google to testify. This investigation is also looking at the potential negative impact these monstrously large companies are having on competition. A couple of weeks later, the Department of Justice also opened its own probe.

Of course, there are also posturing politicians who are aiming to plug for PR points by slamming Silicon Valley. This is a very popular strategy, with the likes of Virginia Senator Mark Warner and Presidential hopeful Elizabeth Warren taking a firm stance. President Trump has rarely been a friend of Silicon Valley either.

Another interest element to consider are the lawyers. Reports have emerged this morning to suggest as many as 20 State Attorney Generals will also be launching their own investigation. The threat of legal action could be very worrying for Silicon Valley, with a number of the lawyers already suggesting they do not like the way the digital economy is evolving, with the concentration of power one of the biggest problems.

The US has generally tolerated monopolies or an unreasonable concentration of power in economic verticals to a point, generally until infrastructure has been sorted, though the pain threshold might be getting to close. This has been seen with a break-up of Standard Oil’s monopoly, as well as splitting the Bell System, a corporation which was a monopoly in some regions for more than a century, into the Baby Bells across North America in the 1980s.

The internet giants will never publicly state they are participating in strategies which in-effect act as a hindrance to government agencies, but it must be a pleasant by-product. First and foremost, the internet giants will want to integrate different products and services for commercial reasons, operational efficiencies or increased revenues for example, however one eye will be cast on these investigations.

It does appear there is an arms race emerging. Government agencies and ambitious politicians are collecting ammunition for an assault on Silicon Valley, and the internet giants are shoring up defences to ensure a continuation of the status quo. This is a battle for power, and its one the US Government could very feasibly lose.

Justice Department green-lights T-Mobile US/Sprint merger

This might sound like the end of the road for one of the most protracted merger processes in recent memory, but T-Mobile US and Sprint will still have to deal with the backlog of legal challenges.

Although this is certainly a win for the duo, it did look ominous for quite a while and there are still a few legal challenges which will have to be dealt with. That said, this is a victory for T-Mobile US and Sprint, and a positive step-forward in the ambition to tackle the market dominance of AT&T and Verizon.

“With this merger and accompanying divestiture, we are expanding output significantly by ensuring that large amounts of currently unused or underused spectrum are made available to American consumers in the form of high quality 5G networks,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.

“Today’s settlement will provide Dish with the assets and transitional services required to become a facilities-based mobile network operator that can provide a full range of mobile wireless services nationwide.”

In short, without the divestment of Sprint’s prepaid mobile business to Dish, the deal would not have gone ahead. What this announcement now creates is a merger player with a larger horde of spectrum ready to tackle the 5G era and a fourth player which can start to make use of the spectrum licenses it has been quietly accumulating over the last few years.

For Dish, deadlines were fast approaching. After securing various spectrum licenses in the mid- and high-band frequencies, authorities were starting to get a bit irate with the lack of action. Spectrum is a valuable resource in the digital economy and a threat had been made; make use of the assets or hand them back. The acquisition of the boost brand should allow Dish to make a run at the mobile world. It will now have seven years to make use of the T-Mobile/Sprint network while it deploys its own.

Of course, while the end is in sight there are still another couple of headaches to deal with.

Several State Attorney Generals have aired their grievances and filed a lawsuit opposing the deal. The primary concern here was the reduction of national telcos from four to three, though it seems they are still not happy with concessions made to create a fourth player in Dish.

“The promises made by Dish and T-Mobile in this deal are the kinds of promises only robust competition can guarantee,” said New York Attorney General Letitia James, who has led the opposition.

“We have serious concerns that cobbling together this new fourth mobile player, with the government picking winners and losers, will not address the merger’s harm to consumers, workers, and innovation.”

The coalition of State Attorney Generals have reaffirmed their opposition to the merger, questioning whether the formation of a new MNO which has no experience in managing a mobile network is a suitable replacement for Sprint. Elsewhere, the Rural Wireless Association is also opposing the approval.

“Expecting Dish, a start-up mobile carrier in its infancy, to be able to compete as a fourth nationwide network, with divested wireless assets from Sprint and T-Mobile and Boost MVNO customers, and subject only to a handful of requirements that will expire, spells disaster for American consumers,” the RWA said in a statement.

“Three years is not nearly enough time to launch a facilities-based network. Clearly, DOJ has no idea what it takes to build a competitive nationwide mobile network.”

Gaining approval from the Department of Justice might have been one of the more difficult tasks on this quest, but this is not the end of the road for T-Mobile US and Sprint.

DoJ ready to greenlight Sprint/T-Mobile US merger – report

It has been one of the most protracted merger approval processes in recent memories, but source close to the US Department of Justice believe a positive decision is on the horizon for Sprint and T-Mobile US.

With Dish seemingly waiting in the wings to purchase Sprint’s prepaid brand Boost, the Department of Justice might well be on the verge of approving the $26 billion merger. According to the Wall Street Journal, a decision could be made public this week, though the budding duo would still have to face legal challenges from several State Attorney General’s before experiencing the merger euphoria.

After months of regulatory and antitrust objections to the deal, the Department of Justice might well be finally convinced. Aside from off-loading Boost to create a fourth nationwide player in the US, the duo would also have to commit to a three-year roadmap for 5G deployment as well as promising no tariff increases during the period.

Originally it did appear the Department of Justice did not share the enthusiasm as the FCC for the deal, though this report seemingly demonstrates somewhat of a U-turn. What is worth noting is all of these reports and rumours are nothing more than hearsay, though it will be welcome news from the T-Mobile US and Sprint executives who have been fighting against the tide for months.

That said, the deal with Dish appears to be central to this approval.

Earlier this week, it was suggested Dish had come to an agreement with Sprint to purchase the Boost brand for $5 billion. As part of the deal, Dish would become a connectivity customer of the newly merged business as it constructed its own network.

This would appear to be a very sensible report as Dish is under pressure to make use of the spectrum assets it has been collected over the last few years. Deadline day is quickly approaching for Dish to demonstrate it will make use of the licences otherwise it would be forced to hand back the valuable assets.

Hopefully the end of this saga is close as any further delays could start to have detrimental impacts on the 5G rollout plans of the two separate organizations. Both T-Mobile US and Sprint are keen to link up as this would create a more consolidated challenge to the leadership position of AT&T and Verizon in the mobile segment.

That said, objections from various parties have suggested reducing the number of nationwide MNOs from three to four would negatively impact competition, while others have also pointed to recent market trends.

In a joint lawsuit against the merger, several State Attorney Generals have pointed to decreasing prices for mobile contracts over the last few years, arguing that the system works. Some might suggest fixing something which isn’t broken is not the best path; if the current level of competition is benefitting the consumer, why should anyone consider changing it.

These reports are nothing more than rumour for the moment, and there are the lawsuits to consider, but it does appear this prolonged saga might be coming to a close sooner rather than later.

T-Mobile/Sprint merger might be heading towards a ‘no’ – report

The merger approval process is heading towards the business-end of proceedings, and the omens are not looking particularly healthy for T-Mobile US and Sprint.

The longer the process takes to complete, the more of a feeling there is the transaction might be denied. As it stands, the FCC has seemingly lit the green light, though it does not appear the Department of Justice (DoJ) is on the same page.

According to reports from Bloomberg, the DoJ is considering additional concessions which would force T-Mobile US and Sprint to create a fourth national MNO to preserve competition. How this would be achieved is not detailed, but it is difficult to see how the duo would be happy with this outcome.

If reports turn out to be true, the concessions bar might be set too high for the parties to be comfortable. This is of course assuming the DoJ is happy with the plans laid out by T-Mobile US and Sprint to satisfy the alleged concession.

The long-standing justification for this merger is to create a more competitive alternative to AT&T and Verizon. To do this, T-Mobile US and Sprint executives have argued combining the network and spectrum assets is imperative. This is where the details of how a fourth nationwide player are needed.

A fair assumption would be the DoJ would insist T-Mobile US and Sprint would spin-off some of their assets to create this fourth alternative. Considering the vast investment which would have to be made, both monetary and time, to establish another MNO from the ground up, it is realistically the only option.

However, spinning-off network and spectrum assets to create a fourth nationwide MNO would most likely weaken the position of the newly combined business. Surely this would undermine the initial justification for the merger? If the merged business does not have access to all the current assets of the pair, would it still be in the same league as AT&T and Verizon?

Critics of the deal are already suspicious of the claims the merged business would be able to satisfy the coverage obligations of the FCC, 97% 5G coverage within three years with no price increases, and what would they say if the DoJ forces the pair to release assets?

These reports also compound theories about the different approaches from the FCC and the DoJ. It would appear the two approving agencies are offering different opinions on a merger for the first time. This can perhaps be explained by the objectives of the agencies.

For the FCC, it does appear improving mobile coverage and quality of experience is the main objective, while the DoJ is focused on preserving competition and choice for the consumer. While there might be some common ground between the two objectives, there is also room for opposing opinions.

For T-Mobile US and Sprint, the situation is not looking the healthiest. Accepting these reported concessions might be difficult if the pair are to remain true to their stated objectives, and that is of course assuming the DoJ accept the response on how they will meet the obligations.

It’s all starting to look a little messy for T-Mobile US and Sprint, and we are starting to get stronger feelings no will be the answer at the end of this prolonged saga.

DoJ doesn’t share FCC enthusiasm for T-Mobile/Sprint – report

The FCC might have a skip in its step after securing concessions from T-Mobile US and Sprint ahead of the proposed merger, but the Department of Justice is not convinced.

Following the approval from FCC Chairman Ajir Pai, and the vote of support from Commissioner Brendan Carr, Sprint share price rose almost 19%. The long-awaited merger to create a genuine challenger to AT&T and Verizon on a national scale looked to be heading in the right direction, only for the DoJ to be the fly in the ointment.

According to Bloomberg, the DoJ believes the concessions made by the pair do not go far enough. This is a move which breaks with tradition, generally the FCC and the DoJ sing from the same hymn sheet when it comes to acquisitions and mergers, though it appears antitrust investigators are still concerned over the threat to competition.

This is perhaps the nuance between the two departments. The DoJ, and various Attorney Generals throughout the US, are primarily concerned with competition, while the FCC rhetoric has been more focused on securing a more efficient and broader 5G rollout.

The concessions have taken the form of three commitments. Firstly, T-Mobile suggests 97% of the population could be covered by 5G within three years. Secondly, Sprint’s prepaid brand Boost would be sold to preserve competition. And finally, there would be no price increases while the 5G network is being deployed.

Of course, there is a very real risk to competition. Taking the number of national telcos from four down to three will mean less choice in the market. Less choice means less opportunity for disruption, even if the hatred from T-Mobile US CEO John Legere towards AT&T and Verizon is effectively teemed from his ears. There are too many examples through history of abuses when it comes to competition for some to be completely comfortable.

You also have to weigh up the current cost of mobile connectivity in the US. Although much has been done to help the consumer, ARPU is still notably more than in Europe, where competition is significantly higher. According to Moneysavingpro.com, the average postpaid contract in the US is as much as $80.25 compared to $30.06 in the UK. US consumers are already feeling the sharp end of the competition stick, and few would want to risk this difference to increase further.

The question is how much pain the consumer can tolerate in pursuit of leadership in the 5G race. Carr has spoken of his primary role at the FCC being focused on creating a leadership position for the US in the 5G era and part of this will depend on getting 5G in the hands of the consumer as quickly as possible. The sooner consumers have 5G, the sooner US firms can scale new services and products before assaulting the international markets. This is a playbook taken from the very successful 4G era.

With the US taking a leadership position in the 4G world, companies like Google, Amazon, Uber, AirBnB and Lyft thrived. These are companies which would have existed without the 4G euphoria, but success was compounded because of the connectivity gains. We are likely to see the same trend in the 5G world, with new products and services being designed for 5G connectivity. The question which remains is where they will call home.

This is the equation the FCC and the DoJ have to balance. The need to protect the consumer against the drive towards future economic success on the global stage. There is not going to be a perfect answer for this one, the US is gambling on the future success of the economy after all.

T-Mobile/Sprint merger approval is still hanging in the balance

The US DoJ’s anti-trust chief has not made up his mind on the T-Mobile/Sprint merger case, saying the deal must meet key criteria.

Speaking on CNBC (see below) Makan Delrahim, Assistant Attorney General for the US Departments of Justice’s Antitrust Division, said he has not made up his mind yet. Although he refused to comment on if his staff resisted the deal, as was reported by the media, Delrahim did allude to more data being requested from the two parties.

Delrahim also dismissed the notion that there is any magical number of competitors to deliver optimal competition in a regulated market like telecom. Any proposed deal needs to deliver efficiency, but the efficiency needs to be both merger specific, that is the efficiency cannot be achieved through other means, and verifiable.

With regard to the effects of the merger on consumers, Delrahim listed two items, price effect and coordinated effect. The first is related to the potential price move up or down after the merger. The second refers to if the merged company has the incentive to continue to compete with the existing competitors on price, in this case AT&T and Verizon. 5G will also factor in the DoJ’s decision making consideration, Delrahim said. But, instead of being positioned as a counteract against China, in this interview Delrahim was treating 5G in the framework of service offer to consumers, and the merger’s impact on it.

When being asked on the timeline, Delrahim said there is no deadline on the DoJ side, except that the deal cannot be completed before a certain date. This timeline can be extended if more deliberation is needed.

On the FCC front, another hurdle that the two carriers need to overcome before they can become one, they continued to play the offensive. Last week representatives from the two companies, including John Legere, the CEO of T-Mobile, and Marcelo Claure, Executive Chairman of Sprint, called on the FCC commissioner Jessica Rosenworcel and her Legal Advisor. The team presented the updated merger case, including their pledge to deploy home broadband, drive down prices, deliver more benefits to prepaid customers, and create, instead of cutting, jobs.

FCC’s unofficial 180-day consultation period was reopened early this month, after being halted three times, and is now on day 147.

Makan Delrahim’s CNBC interview is here:

 

 

DoJ rumoured to be half-convinced by T-Mobile/Sprint 5G argument

The anti-trust chief in the Department of Justice is said to be receptive to T-Mobile and Sprint’s argument that the combined company will improve America’s competitiveness in 5G.

Fox Business reporter Charlie Gasparino claimed people close to Makan Delrahim, Assistant Attorney General for the DoJ’s Antitrust Division, have disclosed that the department is receptive to the argument that a third strong operator in the US will help the country compete better with China.

Gasparino first tweeted about his “Scoop sources” before he went on the screen:

As we reported earlier, the proposed merger still needs to overcome two barriers before it can be completed: the DoJ and the FCC. Gasparino explained that, unlike the FCC which needs a panel decision, the DoJ’s decision rests on Delrahim’s office alone. It looks that the argument for 5G competitiveness from the merger is outweighing his concerns for anti-trust consequences. Also significantly, Gasparino said, the FCC tends to follow the DoJ’s decision in cases like this.

5G has always been a central argument in the merger case. In its public interest statement published in June 2018, the companies stressed the investment commitment and the benefits the New T-Mobile would bring to America. $40 billion in the development of a nationwide 5G network and services will be made by 2024. “The New T-Mobile network will have approximately double the total capacity and triple the total 5G capacity of T-Mobile and Sprint combined, with 5G speeds four to six times what they could achieve on their own,” the companies said in the close to 700-page document.

The argument of competing with China on 5G with a third strong operator comes days after the companies claimed the merger would benefit up to 50 million Americans who currently do not have access to broadband, when T-Mobile launched its LTE FWA trial.

Meanwhile, the position of FCC is not getting clearer. On 7 March, for the third time, the agency put a hold on its 180-day countdown to gather feedback while ploughing through new information, which, FCC detailed, is related to the extension of a simulation model for the merger provided by the companies. The Commission will re-open the countdown at day 122 on 4 April.

The market was encouraged by the news. Both companies’ share prices grew following Gasparino’s tweet. T-Mobile closed the day up by 1.42%, and Sprint’s up by 1.75%.

US DoJ throws $85 billion spanner in the works of AT&T-Time Warner

The US Department of Justice has decided to appeal the June 12 court ruling allowing AT&T’s $85 billion acquisition of Time Warner, it announced late on Thursday.

In a brief Notice of Appeal filed on July 12, the DoJ notified the District Court that it intends to bring the case to the Court of Appeals against the ruling that will allow AT&T’s planned acquisition of Time Warner to go ahead with no restrictions.

The US government, which had until August 12 to ponder an appeal, took a month to decide it would lodge an objection to the mega-acquisition. US entertainment industry news site Deadline sourced a copy of the Notice, signed by Craig Conrath, who was leading the government’s legal team during the trial. It doesn’t elaborate on the grounds upon which the appeal would be lodged, but the decision to appeal seems to have caught AT&T by surprise.

“The Court’s decision could hardly have been more thorough, fact-based, and well-reasoned,” David McAtee, the operator’s General Counsel, said in a statement. “While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances.  We are ready to defend the Court’s decision at the D.C. Circuit Court of Appeals,” he blustered.

The ramifications of the potential appeal could hardly be greater — not only regarding the future of a newly-created WarnerMedia business, and whether it might need to decouple from its parent company, but also for the whole telecom and media industries. The boardrooms of Comcast and Disney will be full of sweaty palms (yuk!), as the outcome of the appeal will set a precedent for future vertical integration deals, including their bidding war for 21st Century Fox.

If the DoJ was to win the appeal, the US Solicitor General could bring the case to the Supreme Court, where the judges generally siding with President Trump are in the majority. Since the days when he was a candidate, Mr. Trump has been a vocal opponent to the merger, citing the danger of “too much concentration of power in the hands of too few.” However, such a decision would not be without a twist: Eriq Gardner, the Senior Editor at The Hollywood Report, discovered in a disclosure paper that John Roberts Jr, one of the Supreme Court Chief Justices, still holds Time Warner shares.

AT&T has been moving very fast after the June 12 ruling to integrate the two companies, from appointing executives to stamping its authorities over HBO, although it has decided to leave Turner Broadcasting, the owner of CNN among other assets, independent until February 2019. However, it has already broken at least one promise related to the deal: instead of making the service more affordable, it just raised the monthly bill for its DirecTV Now service by $5.