New York rages against T-Mobile/Sprint merger

Things are already looking dicey for the proposed merger between T-Mobile US and Sprint, and then New York’s Attorney General wades into the saga with scathing opinions.

“This is exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent,” said Attorney General Letitia James.

Support for the merger is pretty rare nowadays, though James and California Attorney General Xavier Becerra have filed a multi-State lawsuit to add more fuel to the flames. In total, ten States have been included in the lawsuit, compounding the headaches induced by an already prolonged approval process.

The omens are not looking particularly positive for T-Mobile US and Sprint.

“When it comes to corporate power, bigger isn’t always better,” said James. “The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country.

“That’s why we are going to court to stop this merger and protect our consumers, because this is exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”

T-Mobile US and Sprint are promising a cheaper and faster service, as well as a challenge to the dominance of AT&T and Verizon, but this isn’t enough to convince the legal heavyweights. It’s the same argument which is evident throughout the world of mergers and acquisitions; four to three does not encourage optimism.

Perhaps the most damning argument against the merger is market trends over the last decade. According to the US Labor Department, the average cost of mobile service has fallen by roughly 28% over the last decade, while mobile data consumption has grown rapidly. T-Mobile US and Sprint might argue a merger is better in the long-run for competition, but there is an old saying; if it isn’t broken, don’t fix it.

With four telcos competing for valuable post-paid subscriptions, the consumer does appear to be winning. Tariffs are expensive in the US, though they are becoming cheaper. Another interesting aspect to the lawsuit points to some skulduggery from the duo.

The Attorneys General’s investigation into the merger found that many of the claimed benefits were unverifiable and could only be delivered years into the future, if ever. Specifically, the AG’s are referring to the lightening speeds promised and the ease at which the duo believes a 5G network can be rolled out nationwide. This isn’t necessarily stating it is not possible, just that the claim is not supported by evidence.

For a decision which is likely going to be based on evidence provided, this is a very simple, but powerful argument for blocking the merger.

NYC public transport finally gets the mobile payments memo

Despite the US being the leading voice in the technology industry, adoption of some pretty well-established technologies has been lagging across the country.

That is about to change in New York before too long, as the public transport system gets a much-needed upgrade to include Near-field communication (NFC) payments. Last week, Google announced it had integrated its payments system into the New York public transport system, and now Apple is getting in on the movement.

The contactless payment revolution has been sweeping the globe in recent years, drastically changing the way we work, play and get around. In London, for example, you can almost hear the groans of waiting customers when the now “old fashioned” chip and PIN method of payment is used. But contactless payments are now much more wide-spread than a speedy round of beers down the pub.

Contactless payments were first introduced on London buses in December 2012, and later extended to Underground and National Rail services in September 2014. The Oyster Card system is quickly becoming a thing of the past, with Transport for London (TfL) now claiming more than 50% of journeys are completed using contactless payments. In fact, TfL believes it is saving between 9-14% on fare collection because of the introduction of contactless payments.

Of course, London is not the only city which is making use of the new technology. Globally, there are now more than 100 cities making use of contactless payments, including the likes of Sydney (introduced in 2018), Moscow (2017) and Madrid (2017).

What is worth noting is there are different types of systems. Madrid, for instance, requires you to buy a specific ticket as opposed to using your debit of credit card, while Sydney only upgraded to NFC mobile payments earlier this year. That said, progress is progress.

And the benefits are more than just operational efficiencies for the public transport systems. It is substantially quicker than traditional means, a very important factor when you consider how many people are moving out of the countryside and into the cities nowadays. According to the UN, 68% of the world population is projected to live in urban areas by 2050, up from c.55% today. There will be considerable strain placed on public transit systems before too long.

In New York, this is an upgrade which is long-overdue. Google is introducing its mobile payments systems to the Subway from May 31st, as will Apple. The tap-to-pay system will only be available on the 4/5/6 lines between Grand Central Station in Manhattan and Atlantic Avenue-Barclays Center in Brooklyn to start with, as well as the buses in Staten Island. This is only the beginning however, as the plan is to rollout the system across the entire public transport network over the next few months.

Over time this system will begin to improve. Google has already said it will continue to work with The Metropolitan Transportation Authority to bring more features with Google Maps and Google Assistant, much like it does with many other cities around the world.

Welcome to the digital world New York!

Big Apple says no to Amazon

The PR bout between Amazon CEO Jeff Bezos and Democratic Congresswomen Alexandria Ocasio-Cortez has been settled, with the internet giant cancelling plans to open a New York office.

HQ2, as it had come to be known, was supposed to be Amazon’s attempt to expand its corporate footprint, opening a new, secondary, headquarters outside of Seattle. After a year-long search, the decision was made to split duties between Virginia and New York, with each eventually playing home to 25,000 employees promised Amazon. It seemed like an attractive proposition, but political and residential opposition killed the idea.

“After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens,” the company said in a statement. “For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term.

“While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.”

Amazon has been on a year-long road trip to figure out which city would effectively bribe it the most to become the home of the next corporate headquarters. The ‘bribe’ would come in the form of tax incentives and relief for investing in a region, and while this might have looked like a coup for New York and the district of Queens, there has been political opposition.

Ocasio-Cortez was the spearhead, objecting to the billions of dollars’ worth of benefit the internet giant would realise, all at the expense of the tax payer. Opponents to the development also questioned how much of a benefit Amazon would be to the city, as many locals would not be qualified for the newly created positions.

Although there are arguments on both sides of the equation, you have to wonder whether this is a short-sighted move from a politically naive representative. Firstly, New York has not shown itself to be particularly welcoming to technology, the fastest growing segment of the global economy. And secondly, just because people are not qualified for these roles today, doesn’t mean the generations of tomorrow won’t be qualified.

Starting with the first point, many cities across the US are attempting to make their own region appear more attractive to technology companies. This is always for the same reason; politicians and bureaucrats recognise the growth potential of the technology industry and the greater impact this can have on the city. In taking such a strong and aggressive stance against Bezos, New York has given itself a slight technophobe image.

Of course, what is worth noting is the city should not be taken advantage of. This is what many feel Amazon has done, using the immense promise of jobs, investment and prosperity to bleed the city dry. Whether you look at the tax incentives as a pragmatic move or abuse of the system depends on your political swing, but there are fair arguments on both side of the equation.

The second point of opposition is down to the jobs which will be created. Many have suggested these would not be suitable for the local population of Queens, instead outsiders would stream into the area, potentially bringing with them higher house prices and pretentious coffee shops. There is certainly some validity to this position, though you have to wonder whether this is short-sighted.

The first generation might not be the most qualified, but in bringing a new type of job to the area, future generations have another target to aim for. Companies like Amazon also like to run initiatives like coding clubs in local schools, offering young students an opportunity to learn a future-proofed skill which might not be available to them otherwise. There is also secondary employment brought to the district because of the presence of Amazon.

Amazon is also a leader is the quickly prospering field of artificial intelligence. Although engineering and innovation for AI would almost certainly be based in Silicon Valley, the presence of such a massive office in New York would allow the city to create a hub of excellence for AI. Considering the role this emerging segment will play in the future, this is potentially a massive missed opportunity.

There are arguments on both sides of the equation, but we believe this is a short-sighted campaign of opposition. More effort should have been made to renegotiate the terms, as much more is lost than gained with New York snubbing Amazon.

New York wades in to the T-Mobile/Sprint debate

New York Attorney General Barbara Underwood could prove to be another hurdle for T-Mobile and Sprint to overcome in their headache-inducing merger.

The problem for the pair is there seem to be a lot more objections surrounding the tie-up than there has been support. After T-Mobile CEO John Legere seemingly got little response from his appeal to MVNOs to support the transaction, the wild-eyed leader has opened up to opinions from staff; a dangerous move considering some would certainly be under threat of redundancy.

Perhaps what the duo didn’t need are objections from the New York Attorney General Office over fears the consumer might get screwed. According to the New York Post, the objection is relatively simple. T-Mobile runs a prepaid service called MetroPCS, while Sprint has Boost and Virgin Mobile. Bringing all three into the same business could lead to one or more being scrapped, reducing competition. Secondly, all three are incredibly aggressive on pricing, but again, bringing all three into the same business could end this trend of undercutting, and an increase in price. The New Yorkers are concerned tariffs could become too expensive for some.

While objections from a few lawyers might not be the worst thing in the world for T-Mobile and Sprint, it seems there is a queue forming. In fact, the FCC released a notice last week which stated the Attorney General Offices of Alabama, Connecticut, Florida, Hawaii, Mississippi, Tennessee, Virginia, Washington, Wisconsin and the District of Columbia have all requested information to assist their own investigations into the merger. The lawyers are lurking, and the more who gather around the fire, the less pleasing the situation appears for T-Mobile and Sprint.

This of course might mean nothing. All major parties in the US are perfectly entitled to do their own due diligence surrounding the deal as transitioning from a market with four major telcos down to three is a massive move. Considering there will be regions across the country where this transaction effectively creates a communications monopoly, every chance to scrutinise the deal should be taken.

As it stands, the self-appointed shot-clock on approving the deal at the FCC is on hold. This again is simply down to the magnitude and the potentially significant consequences of the deal, and should not be surprising at all, but the longer it stands still, we suspect the more nervous executives will become. Mergers of this nature have already been shot down in the US, and this deal does seem to be hanging in the balance.

Net neutrality refuses to die; is it some form of genetically-modified super-cat?

With a coalition of 23 Attorney Generals (AGs) asking Federal judges to reinstate net neutrality rules, you have to wonder what experiments have been conducted on net neutrality; how many lives does it actually have?

Led by New York Attorney General Barbara Underwood, the coalition has filed a brief with United States Court of Appeals for the District of Columbia Circuit to block the FCC’s rollback of net neutrality, which the AGs have deemed illegal. The brief is just another chapter in the saga of net neutrality, which despite the best efforts from FCC Chairman Ajit Pai, refuses to disappear from the regulatory landscape.

“A free and open internet is critical to New York – and to our democracy,” said Underwood. “By repealing net neutrality, the FCC is allowing internet service providers to put their profits before consumers while controlling what we see, do, and say online.

“As we detail in our brief filed today, the rollback of net neutrality will have a devastating impact on millions of New Yorkers and Americans across the country, putting them at risk of abusive practices while undermining state and local regulation of the broadband industry. We’ll continue to fight to protect consumers’ right to a free and open internet.”

Aside from Underwood representing New York, AGs from California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Mississippi, New Mexico, New Jersey, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia, are providing the resistance to Pai.

The brief itself focuses on two areas. Firstly, the FCC’s order is arbitrary and capricious because it exposes the consumer to potential abuses from communications providers. And secondly, the AGs have deemed the FCC’s mission to undermine state regulations as illegal. While protecting the consumer is common rhetoric for this battle, the state versus federal jurisdiction fight is starting to emerge again.

The brief also seems to ask the Court of Appeals to apply some logic to the situation. Why should such a drastic reversal in regulation be allowed?

“For more than fifteen years, the Federal Communications Commission has agreed that an open Internet free from blocking, throttling, or other interference by service providers is critical to ensure that all Americans have access to the advanced telecommunications services that have become essential for daily life,” the brief states. “The recent Order represents a dramatic and unjustified departure from this long-standing commitment.”

While net neutrality has been officially banned from the rule books, the resistance to change is on-going. Pai is trying to remove every footnote and possible means a Democrat government could use to reinstate the rules, most recently he is trying to reverse the decision to classify telcos as common utilities, supporters are not making it easy. That said, the resistance could use a win pretty sharpish.

The AGs, internet players, privacy advocates and general busybodies do seem to be making life difficult for Pai, but the momentum is most certainly with FCC plans to eradicate net neutrality. The resistance is proving to be nothing more than an irritation at the moment, though a win in the courts would certainly provide genuine progress. Unfortunately, that win is yet to appear. Hopefully this brief will kickstart some action.