New York ends resistance to T-Mobile/Sprint merger

New York Attorney General Letitia James has announced her office will not pursue an appeal against the courts decision to approve the $26 billion T-Mobile US and Sprint merger.

While the other states involved in the lawsuit to prevent the combination of the two telcos are yet to formally make their position public, James was the primary driving force behind the legal opposition. Others might try to step up, but without one of the US’ fastest growing political forces at the helm, responses look relatively pitiful.

“After a thorough analysis, New York has decided not to move forward with an appeal in this case. Instead, we hope to work with all the parties to ensure that consumers get the best pricing and service possible, that networks are built out throughout our state, and that good-paying jobs are created here in New York.

“We are gratified that this process has yielded commitments from T-Mobile to create jobs in Rochester and engage in robust national diversity initiatives that will connect our communities with good jobs and technology. We are committed to continuing to fight for affordability and access for all of New York’s mobile customers.”

James’ opposition to the $26 billion merger first emerged in June 2019 when, alongside California Attorney General Xavier Becerra, support was raised for a multi-state lawsuit against the corporate transaction. James managed to convince 12 State Attorney Generals to oppose the deal, questioning whether it would be beneficial for the consumer and attempting to disprove that Dish would not be adequate as a fourth mobile operator.

In a 173-page opinion, Judge Victor Marrero effectively said the merger was a good idea as Sprint was not worthy of being called competition. The combined entity would be a much better representative, while Marrero believed Dish plans to scale rapidly were viable, even if few others do. His ruling effectively killed the resistance to the merger.

Although some will be disappointed the lawyers are giving up the fight, it might simply be a case of looking at the bigger picture. James has pointed to job creation promises in her state, though now the attention will turn to ensure these jobs are actually created. Back in October, Colorado and Mississippi both did the same; the legal opposition was dropped as agreements were forged with T-Mobile US and Dish to offer benefits to the states.

While there will be some benefits to the transaction, it is impossible to avoid the negatives. T-Mobile US and Sprint will be able to realise efficiencies to better compete with AT&T and Verizon, while Dish will offer more jobs. However, there will be a rationalisation project after the transaction leading to job losses in shared business functions (finance, legal etc.) and also in areas where the retail footprint overlaps. Redundancies are unavoidable.

The question which remains is who will get the best slice of the benefits?

Colorado agreed to drop the lawsuit against the merger if Dish was to create 2,000 jobs in the statey and will also keep its corporate HQ in the city of Littleton for at least seven years. The Attorney General has also negotiated an accelerated 5G deployment timeline with T-Mobile US in exchange. Over in Mississippi, former-Attorney General Jim Hood also negotiated an accelerated 5G deployment plan and also a ceiling on tariffs for consumers for a five-year period.

These were the only two states to drop out prior to the conclusion of the lawsuit, though now the lobbying for attention can begin as T-Mobile/Sprint and Dish are wooed by each of the states for their own benefit. James has said the deal offers new jobs to citizens in Rochester, New York, though with other states considering more legal action, T-Mobile US and Dish might have to hit the negotiating table elsewhere.

In California, Attorney General Becerra is considering his options, while Ken Paxton, the Attorney General for Texas, has not stated whether he will pursue an appeal to the decision. These might not be the catalyst for opposition that Letitia James is, but they will certainly be able to cause a problem. T-Mobile US, Sprint and Dish executives want this deal done, are will probably be willing to negotiate some attractive deals.

New York Governor proposes localised net neutrality rules

New York state will join the likes of Washington and California in creating localised net neutrality rules.

Governor Andrew Cuomo announced the new rules to follow-up an executive order from 2018 which prevented Government agencies from entering into contracts with telco and technology companies unless they followed net neutrality principles. While the complications of contradictory state- and federal-level rules have not been fully appreciated, New York joins the crowd in ignoring the FCC.

“A free and open internet is one of the great equalizers — allowing every person the same access to information and helping protect freedom of speech,” said Cuomo.

“While the federal administration works to undermine this asset, in New York we are advancing the strongest net neutrality proposal in the nation so big corporations can’t control what information we access or stymie smaller competitors. These protections will help ensure an open market for ideas and content across platforms and preserve the unimpeded access to online content the public wants and needs.”

As part of the rules, telcos will be prevented from any blocking, throttling or paid prioritization of online content, while ‘zero-rating’ products will also be deemed illegal. Cuomo believes these rules exceed the levels of protection which were offered to the consumer under the net neutrality rules put in place by former FCC Chairman Tom Wheeler.

Although the net neutrality rules were officially undone by a Republican-controlled FCC on December 14, 2017, New York now becomes the fourth state to create its own rules. Washington State was the first, though California and Maine have followed suit. The next Presidential Election will dictate the next chapter of this story, though the current position is not healthy.

What is slowly emerging across the US is a fragmented regulatory landscape. This is not only because of the polar opposite approach in New York, California, Maine and Washington State compared to the FCC’s stance, but also the nuances between the different net neutrality regulations. None will be exactly the same creating a patchwork of legislative complications. Companies like consistency, and this is anything but consistent.

New York Attorney General maintains opposition to T-Mobile/Sprint merger

The T-Mobile/Sprint merger might have received official backing from government agencies, but New York Attorney General Letitia James is not giving up on her case to block it.

The backdrop to this recommitment to the cause is a slightly unusual one. The press conference itself was focused on a lawsuit which was filed against Juul, an e-cigarette company James is looking to have banned, but the floor was opened-up to ‘any other business’.

“Our case against T-Mobile is an antitrust violation, obviously we’re concerned with anti-competitive behaviour,” said James. “Providing public benefits are good but they do not address the antitrust violation.”

In announcing John Legere will step-down from the top job at T-Mobile US, and outlining the succession plan, T-Mobile US is clearly confident the deal will now pass without complication. However, James is a very interesting opponent.

James comes across as an incredibly ambitious individual, and it might not surprise that many if she decides to run for alternative public office positions. It is too late for James to throw her hat into the ring for next years’ elections, though there will plenty of opportunity for this lawyer to climb the greasy pole of politics.

This is what should worry any of the firms James has cast her eye on. Politicians love a war story, a scalp to display in front of the voting public. Campaign speeches are full of rhetoric of how that individual has selflessly fought for the general public and won. Next time a US politician takes the stage at a campaign rally, note the number of times the following phase (or variant of) is used;

When I was [insert previous position] I fought for the people of [insert place] to [insert social equality example].

If James has grander political ambitions, she will need plenty of war stories. It is a tool in the popularity contest which is politics and fighting against the T-Mobile US/Sprint merger could be a perfect example. The Juul case is another, while James has been pretty vocal in pursuit of President Trump’s tax filings.

James has decided the T-Mobile US and Sprint merger is anticompetitive. The position is relatively simple; more service providers means more competition, which is only good for the consumer. There are of course pros and cons to both sides of the telco consolidation argument, but James has set her position, and this will not be changed. With the trial set to begin on December 9, this saga might come to a close soon.

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.