NSR Policy by Blair

Big Week Ahead for C-Band, TMUS/S/DISH. Plus Quick Follow-Ups on DirecTV/DISH and POTUS/FCC Chair Lunch

In this weekend update we explain why you can probably skip this one but you will definitely want to read next week’s.[1]Both our marketing and data analytics department hated this opening line but we always go with honesty as being the best policy.  And we know that not all weeks have the same significance.  So really, particularly given the confluence of baseball playoffs, football, and the totally bizarre combination of greatest Elmore Leonard novel ever and a bizzaro version of Lawrence of Arabia engulfing DC, if you want to skip an update, skip this one  On the C-Band front, a hearing Thursday, and the likely lead up, will provide the clearest public information about the points of view of Chairman Pai and an important critic, Senator Kennedy.  On the TMUS/S/DISH litigation front, we will likely finally see the FCC order, providing our best view of the strength of the pro-deal arguments.  On both fronts, we analyze news that emerge last week, including confirmation of the FCC coming together on at least 300 MHz, thoughts on the impact of individual state moves on the wireless merger, the ruling by the trial judge on Trump’s taxes, and some Tunney Act filings.  We also provide quick thoughts on the continuing rumors on a DISH/DirecTV tie up and the “family” lunch between President Trump and Chairman Pai.

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TMUS/S: As Mississippi Goes, So Goes Mississippi

Earlier this week, Mississippi dropped out of the litigation against the proposed TMUS/S deal.  Fox Business News reporter Charles Gasparino tweeted “@TMobile @sprint lawyers say more state AGs will join @MississippiAGO and drop from suit to block merger.”  Are those lawyers right?[1]We can’t help but note that Mr. Gasparino’s business model apparently is to tweet out whatever the T-Mobile lawyers tell him.  We respect that as a business model that might work for him (and he does look terrific on television) but if we followed that business model, we would have reported last December that the deal was about to wrap up at the FCC and DOJ with no further material conditions and with no risk of a state lawsuit and Mr. Legere would have said nice things about us on his February investor call.  And we would have been wildly wrong.  To be clear, we are not accusing any members of the T-Mobile team, who we deeply respect and who have done a great job, of misleading anyone.  We simply wish to reiterate what we said when Mr. Legere criticized us in February for suggesting the deal had material obstacles to closing, that he and his team have their job—create an environment in which deal approval seems inevitable—and we have ours, which is to analyze public information to determine the probabilities of various outcomes. (LINK)  Maybe, but we doubt it, for four related reasons.

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Top Q’s and A’s for TMUS/S/DISH, C-Band, DBS merger, Techlash and Impeachment

In this week’s update we discuss the biggest questions of the week on the wireless merger (including on the impact of Florida joining the DOJ, the status of the FCC order, why the likely witness line-up helps the companies in litigation, and what is Softbank doing with Huawei), C-band (what is Senator Kennedy up to, what are the broadcasters up to, and why hasn’t CBA filed a new sales plan), a potential DBS deal (getting a big boost from Pai and maybe from an internal AT&T reorganization), Techlash (what the Zuckerberg/Warren press battle tells) and a few telecom policy implications from the DC focus on impeachment.

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Summary of Call with Antitrust Expert Matthew Cantor Regarding Judge in TMUS/S Trial

Last week we held a call with an antitrust Lawyer Matthew Cantor, of the firm Constantine and Cannon.  Not only is Mr. Cantor a distinguished antitrust lawyer with experience in telecommunications and media matters, he is also one of the few lawyers who has ever tried an antitrust case before Judge Victor Marrero, the judge who will preside over and decide the states’ challenge to the TMUS/S deal.

Attached, please find a transcript for that call.  But first, we’d like to summarize some key points, with actual quotations edited for brevity.

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TMUS/S and the Sounds of Silence; C-Band and the Hum of Congress.

In this weekend update, we attempt to unravel the mystery of why the FCC order on the merger has not yet emerged (hint: rhymes with Tar[1]Aficionados of the history of North Carolina, known as the Tar Heel state (and also where this update is being written) will get the additional meaning of the hint.) and why DISH has not yet made announcements of corporate deals that would help the merger get through the state litigation.  We also provide quick takes on Pennsylvania’s entry as a plaintiff, the California PUC, news flowing from investor conferences, and disagreements over the trial calendar.  We also try to interpret the vague messages being sent by Congress to the FCC on C-Band and close by noting a new case that could (but probably won’t) lead to a significant deregulation of cable, telephone, and mobile companies.

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Makan on the Hill: Did He Help or Hurt T-Mobile’s Case?

DOJ Antitrust Chief Makan Delrahim, along with FTC Chair Joe Simons, appeared at a Senate Antitrust Oversight Committee yesterday.  Most of the questioning was on the various antitrust efforts directed to constrain the power of big tech companies, but there were some questions on the approval of the T-Mobile/Sprint deal.  Some, such as noting the hotel preferences of T-Mobile executives, had political meaning but, in our view, no meaning in terms of the trial.  We were, however, struck by three comments Mr. Delrahim made, one of which we think is likely to be used at the trial.  The other two probably won’t but nonetheless, in our view they call into question the strength of some of the companies’ argument for the deal.

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NSR Policy: C-Band and Congress, Settlement Direction in TMUS/S, and more antitrust variables for Elliot and AT&T

In this weekend update we discuss how Congress is the sleeping giant of the C-Band policy, what might cause it to wake up, and how investors may be misreading the timing window for such action.  We also discuss why the potential impact of the states’ attorneys generals’ new activism against big tech likely hurts, instead of helps, settlement discussions in the T-Mobile/Sprint litigation (and preview an upcoming call on the trial).  We close with a discussion of the three variables investors should be looking at in gaming out antitrust concerns related to any AT&T divestitures that might follow Elliot Management’s campaign to get AT&T to refocus and deconsolidate.

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