For investors last week, there was only one story that mattered: the last-minute change in signals from the FCC regarding C-Band and the subsequent drop in Intelsat stock. In this weekend update, we analyze the causes and endgame of the shift. As we have warned, it appears that Congress (particularly Senator Kennedy) and the White House are now material players on the issues of who runs the auction and how the proceeds are distributed. While CBA attempted to resuscitate its plan with a specific offer to transfer funds to the Treasury, we think that effort will likely fall in the category of too little, too late, as the FCC moves in towards an FCC run auction with more proceeds likely to go to the Treasury. CBA, however, retains significant leverage and is still in a position to achieve much of their original goal. While much of the discussion has been about who runs the auction, we point out how an FCC run auction can provide significant funds to various stakeholders in ways that also directly are tied to achieving public purposes. We also discuss how details of the transition are likely to move towards the front-burner in the next round of public comments. Finally, we briefly discuss a quiet week, from an investor perspective, in the big wireless deal and why Labour’s proposal to nationalize British Telecom will not travel across the Atlantic.
C-Band: Where Will Pai Shift Lead Us?
There’s something happening here/what it is ain’t exactly clear….
It’s time we stop/ hey, what’s that sound/ everybody look-what’s going downOur alternative song of the week was Daniel Powter’s Bad Day, but we regarded those lyrics, given the events of last week, as too snarky, too backwards looking and potentially misleading. Still, for reasons we think everyone reading this would understand, the song kept ringing through our heads.
The direction until last week. Since the spring, we have believed that the FCC would adopt an C-Band order in December roughly along the lines proposed by CBA: a CBA run auction, following the rules of a traditional FCC auction, with proceeds split between stakeholders for transition costs, and the rest split between CBA members and the US treasury (with high uncertainty about that CBA/US split though the US was likely to get more than what consensus believed), and a CBA run transition. We noted that CBA had adopted what we characterized as a “four corners” strategy of running out the clock without filing in the details of the auction, the financial split, and the transition. That strategy created, in our view, significant political and litigation risks.
The direction now. In the past week, it appeared that risks we identified had blown up the CBA strategy and the FCC will now take a different path. We no longer expect an FCC order in December (or publication of a draft next week.) Rather, as of this writing, we expect a clarification statement from the Chairman this coming week, claiming that significant progress has already been achieved (consensus on 300 MHz being reallocated and principles for an auction) and that early in 2020 he will send to the Commissioners an order detailing both a plan for moving forward and a number of questions, subject to a relatively quick public comment period, that will enable the Commission to provide a detailed path forward, resulting in an FCC auction late in 2020. While that is the most likely scenario, we can envision another reversal as the lobbying at the FCC, the Hill, and the White House has been intense and neither Pai nor the White House have publicly said anything that locks them into one direction or another.
We will leave it to our New Street colleagues to evaluate the financial impact of such a change in direction (see our colleague Vivek Stalam’s thoughts HERE). In the remainder of this note we focus on how the new direction will influence the policy outcomes. Our basic point is that while the last week represented a significant shift in a policy direction, there are policy paths that lead to similar economic outcomes.
Back to the basics: What is really going on? The core issue is that the FCC is seeking to take a 500 MHz band that is being used for one purpose and reallocate it so that a large chunk can be used for terrestrial mobile 5G and the remainder remains to be used for the prior purpose. In this scenario—similar to many others the FCC has faced before--there are two groups of stakeholders; those who are currently using the band and those who would benefit from the new use of part of the band. The fundamental job of the FCC is the balance the interests of those stakeholders and adopt a plan that meets the requirements of the law and causes that transition to happen as quickly and seamlessly as possible. In doing so, there are a number of issues that have to be addressed, including a band plan, a sales process, and a transition plan, with proceeds from the sale distributed so as to facilitate the transition, provide appropriate incentives for timely cooperation, and provide funds to the US treasury.
In seeking to address those issues, the FCC is now, in our view, working on its third version.
1.0. In version 1.0, which roughly ran throughout 2018, the FCC majority seemed to accept the idea of CBA run process to reallocate 200 MHZ, with the CBA having broad discretion for how to run the sales and transition process, as well as CBA members receiving all the proceeds. The underlying idea was to treat the reallocation as a private transaction.
2.0. At the beginning of this year, however, some in the majority started to see problems in providing CBA such complete leeway. In version 2.0, which roughly ran throughout 2019, the FCC majority took a more proactive view of some issues, requiring CBA to come up with a minimum of 300 MHz being reallocated, FCC oversight on the sales process, more details on the transition and some of the money being sent to the US treasury and other stakeholders.
3.0. In the last week, however, for reasons we discuss below, the FCC majority again saw too many problems to proceed. In version 3.0, which will run through mid-2020, with an auction later in the year, the FCC will clearly be in charge, as it will run the sales process, require significant new data on the transition, and negotiate the allocation of proceeds in a more transparent manner. As noted before, the FCC could revert to version 2.0. Still, at this point we think the FCC is moving on to 3.0.
Why the shift? To understand the new direction, one must understand the causes. Like many actions in the political/policy arena, there are multiple factors. Before discussing what we think was the biggest factor, we discuss two factors that we think have been underappreciated.
Transition issues more important than understood. Most of the investor interest has focused on the question of who runs the auction and who gets the money. That has also been the concern of Senator Kennedy, who we will discuss later below. It was not the biggest concern, however, of the broad group of industry stakeholders, who are largely indifferent to who holds the gavel in the auction and who the check for buying the spectrum license is made out to. Rather, a significant element, we believe, in moving the FCC from Version 2.0 to 3.0 was concern from current users over reimbursement and flexibility in the transition. That is, while the concerns vary from stakeholder to stakeholder, many of the current users want greater clarity about the way the transition will work, so that they can assure continuity of service, more accurately calculate their costs and be reimbursed for their costs. A number of stakeholders were critical of the CBA plan for failing to do so.
Legal issues and litigation risk also important. We also believe that various FCC staffers have expressed concerns about the legality of the CBA plan and the litigation risk that would follow. For example, AT&T’s long expressed concerns about the legal risks of CBA plan, reiterated in an ex parte this week, as well as its concerns about the transparency on transition issues, has found some support among FCC personnel.
But while those concerns had weakened support for the Version 2.0, what appeared to break it was something else, and while we can’t know for certain, it appears to be the Senator from Louisiana, with a little help from his friends.
Senator Kennedy plays the Trump card. We apologize for the too obvious pun. But really, did we have any choice? In this regard, we are guilty of the same sin as those broadcasters who, when the Houston Astros went down 0-2 in the World Series, couldn’t help themselves from saying, “Houston, we have a problem.” As we have noted for some time, the biggest wild card in the process was Senator Kennedy, a fierce critic of the CBA plan. He did not seem to be gaining traction with fellow Senators. For example, at his recent hearing, none took his view of the CBA plan, though no Senators rose to directly support the CBA plan either. As we suggested, the play for Senator Kennedy was always at the White House and it seems that while Senator Kennedy was with the President campaigning for the Republican candidate for Governor in Louisiana,We were a bit surprised by the number of investors who asked us backwards looking questions about what CBA could have done differently. We prefer to focus on the forward-looking question of what happens next. We simply muse that if CBA had somehow funneled enough money to Governor Edwards so that he could have won without a run-off, the four corners strategy might have worked. Or at least it might have worked in the novel version of this policy process.the Senator caused the President to say something that caused a call from the White House to the FCC and that chain of conversations led to the events of last week.
What was the nature of the call? For investors, the first question is, did such a call really take place? We think so but can’t be certain. We know, however, that if there is a dinosaur footprint somewhere, a dinosaur likely walked there. For Chairman Pai to move to Version 3.0, there had to be a big foot somewhere.Pai never publicly supported 2.0, but there is significant evidence, including a number of statements from Commissioner O’Rielly about where the policy was heading, that implied Pai supported that approach. The White House is the most likely dinosaur in this play. Arguably, there should be some public documentation of such a call. Somehow, we doubt it will be forthcoming.We expect calls for public documentation will be met with words similar to the advice of the Acting Chief of Staff in another context: “get over it.”
The second question is what was said? There are two possibilities, both that lead to different outcomes. The first is that the White House has sided with Kennedy on the matter of substance and advised Pai to go with an FCC run auction in which taxpayers get the lion’s share of the proceeds. If so, the call would have come from the head of the National Economic Council, Larry Kudlow, who would be in a position to talk policy substance with Chairman Pai.
The second possibility is that the call told the Chairman that the President wants to see the Senator’s concerns addressed but gives the Chairman discretion for how to do so. If so, the call would likely have come from Acting Chief of Staff Mulvaney, as it is more a political call than a policy call. Another version—but with the same implications—is a call from Mulvaney that says in essence, “we don’t want any problems with Senator Kennedy. As the FCC created the problem, the FCC has to make the problem go away.”
Again, based on third hand evidence, we think the most likely scenario is Mulvaney made the call and Pai agreed to work with Kennedy to satisfy his concerns but did not commit to a specific policy outcome.
The core debate now: Kennedy v. CBA. In that way, this scenario shifts the core debate. It is not really as it as been, Kennedy v. Pai; it is now, Kennedy v. CBA. That is, if there is a deal between them, Pai would be fine and implement it. The problem is we can’t think of what the economics of that deal would be. Based on what we have seen, the bid/ask between them is too large at this time. But we can think of two scenarios that could cause that gap to narrow.
Can The CBA weaken White House support for Kennedy? CBA, which we believe was blindsided by the White House intervention, apparently believes it can reverse a significant portion of the damage. Mid-day Friday, the CBA released a letter in which it finally clarified what it means by a significant voluntary contribution. In addition, the letter committed to start the auction in 1Q20 if the FCC adopted the plan at its December meeting, and offered to discuss a fund for more rural broadband.
Again, our colleague, Vivek Stalam, put out a note detailing the financial implications (see HERE). From our perspective, we don’t believe it is sufficient to close the deal. It is significantly less generous to the taxpayers than the Eutelsat proposal and its inclusion of a tax liabilities counting as voluntary contributions, which is different than any auction payment, in our view undercuts the viability of the offer. But we think it opens up the door for more productive discussions between the CBA and the FCC, the White House and Senator Kennedy.
The letter also shows that the CBA holds out hope that it can weaken support for Kennedy at the White House and get the FCC back to 2.0. Other evidence of this includes a media campaign, as well as getting supporters to visit political players on the Hill, the White House and the FCC.
Will it succeed? We don’t think so. It seems like a case of too little, too late. In addition to the financial offer being insufficient to satisfy critics, the fast auction looked to a number of observers we talked to as more desperate than real, and the rural offer also seemed like an invitation to continue discussions rather than a commitment to induce a close. But we don’t think it impossible that discussions over the weekend could have again shifted directions.
Can there be an alternative structure that enables reimbursement of CBA members through an FCC run auction? This does not mean CBA’s efforts to secure significant proceeds for their members is dead. Assuming the CBA offer is not ultimately accepted, and the Chairman and majority stick to an FCC auction, what would be the options for reimbursing various stakeholders? One of the misconceptions we have noted among investors is the view that if the CBA runs the auction it gets to keep the lion’s share of the money while if the FCC runs the auction, reimbursement is limited to direct transition costs.
It is true that it would be easier for the CBA to get more if the CBA runs the auction. That is why, we presume, the CBA was so adamant that a CBA run auction was the only way forward. But there is another way forward, one described in a filing by Charter on February 22, 2018. In that filingWe usually summarize comments and rarely quote footnotes but do so here because we think this is where the discussion is heading and wanted to give investors a more detailed idea of the legal framework and the supporting precedent. Charter pointed out (with footnotes directly quoting from actual Charter filing):
“The Commission also has ample authority to ensure that this process adequately compensates incumbent satellite providers and earth station licensees in order to allow for the efficient repurposing and repacking of the C-Band, including reimbursement for the costs of earth station licensees to transition to fiber. As it has in connection with prior auctions, the Commission could require winning bidders to reimburse satellite providers for associated relocation costs.The Commission has required winning bidders in spectrum auctions to reimburse incumbent licensees for their relocation costs since the earliest auctions. See Emerging Technologies Order, 7 FCC Rcd at6886, 6890 ¶¶ 1, 24; In re Amendment of Part 2 of the Commission’s Rules to Allocate Spectrum Below 3 GHz for Mobile and Fixed Services to Support the Introduction of New Advanced Wireless Services, Including Third Generation Wireless Systems, Ninth Report and Order and Order, 21 FCC Rcd 4473, 4495-96, 4505 ¶¶ 39-40, 58 (2006); Teledesic LLC v. FCC, 275 F.3d 75, 78-79, 85-86 (D.C. Cir. 2001). The Commission could also require winning bidders to compensate incumbents beyond their relocation costs pursuant to its Title III authority.See, e.g., 47 U.S.C. § 303(r); P&R Temmer v. FCC, 743 F.2d 918, 928 (D.C. Cir. 1984) (“An FCC licensee takes its license subject to the conditions imposed on its use. These conditions may be contained in both the Commission’s regulations and in the license. Acceptance of a license constitutes accession to all such conditions. A licensee may not accept only the benefits of the license while rejecting the corresponding obligations.”); Greater Boston Television Corp. v. FCC, 463 F.2d 268, 287 (D.C. Cir. 1971) (“There is also latitude for the FCC to insert conditions protective of the public interest, see 47 U.S.C. § 319(c).”). Such a compensation requirement would also promote “the development and rapid deployment of new technologies, products, and services for the benefit of the public, including those residing in rural areas, without administrative or judicial delays.” 47 U.S.C. § 309(j)(3)(A). This payment could take the form of a “reserve charge,” calculated as a percentage of auction revenues determined by the Commission to compensate incumbents for intangible or other costs related to relinquishing spectrum or for the value of their relinquished spectrum. The Commission has recognized that payments for spectrum rights over and above relocation costs are in the public interest and within the Commission’s authority to approve.”See, e.g., Mobile Commc’ns Corp. of Am. v. FCC, 77 F.3d 1399, 1406-07 (D.C. Cir. 1996) (holding that the FCC has authority to require payment for license if it finds that the payment is “necessary to ‘ensure the achievement of the Commission’s statutory responsibilit[y]’ to grant a license only where the grant would serve the public interest, convenience, and necessity” (citation omitted) (bracket in original)); In re Service Rules for the 746-764 and 776-794 MHz Bands, and Revisions to Part 27 of the Commission’s Rules, First Report and Order, 15 FCC Rcd 476, 533-34 ¶¶ 142-145 (2000) (permitting new licensees in the 700 MHz band to reach voluntary agreements with incumbent licensees “that would compensate incumbents for (1) converting to DTV-only transmission before the end of the statutory transition period; (2) accepting higher levels of interference than allowed by the protection standards; or (3) otherwise accommodating new licensees.” (footnotes omitted)); see also In re Service Rules for 746-764 and 776-794 MHz Bands, and Revisions to Part 27 of the Commission’s Rules, Memorandum Opinion and Order and Further Notice of Proposed Rulemaking, 15 FCC Rcd 20,845, 20,863-67 ¶¶ 46-53 (2000) (finding that the Commission had statutory authority under Sections 309(j)(14) and 337(d)(2) of the Act to review and approve voluntary agreements between incumbent broadcasters and new 700 MHz band wireless licensees to expedite the clearing process.). Charter reiterated this message in its meeting with the FCC this past week.In that ex parte Charter summarized the argument this way: “Charter also explained that the Commission has broad authority under Sections 4(i) and 303 of the Act to require auction winners to make payments to incumbent C-Band users to accelerate the reallocation of the band for terrestrial use, just as it has long required winning bidders to make relocation reimbursement payments to incumbent licensees that are displaced in an auction. Charter further explained that such payments are not compensation for a government resource or service, or payments covering a government expense or obligation, and thus would not be considered “money for the Government” under the Miscellaneous Receipts Act (“MRA”). Charter noted that while the Act allows the Commission to use auction proceeds to compensate licensees for voluntarily relinquishing their spectrum usage rights through an incentive auction, the decision whether to utilize this mechanism is within the Commission’s discretion.”
So, what kind of auction would that legal framework lead to? There are multiple ways but for the sake of illustration consider this structure in which the auction proceeds would be distributed along four tiers:
- Tier 1 would be a reserve fund, at least sufficient to pay all stakeholders reasonable transition expenses. There is some debate about whether the reserve price for the auction should be higher than a reserve designed to cover transition reimbursements, but we will leave that discussion for another time.For example, its now dead auction proposal, CBA said the reserve should be based on prices from international auctions. While the proposal never got off the ground enough for a public debate, a number of critics suggested that such a reserve would be higher than justified and therefore would artificially lower supply. (LINK) If the auction failed to produce enough proceeds to meet the reserve price (which we view as highly unlikely)While estimates for the auction proceeds vary widely, we have seen no estimate less several multiples of the highest estimate for transition expenses. the auction would not move forward;
- Tier 2 would be a fund that would go to the US taxpayers. If the idea was that the proceeds be split 50/50, along the lines suggested by Eutelsat, the amount of Tier 2 would be likely be equal to Tier 1;
- Tier 3 would go to the US taxpayers, but the winners would be required to compensate incumbent stakeholders (according to a set formula) an amount—again assuming a 50/50 split--equal to the amount in Tier 3. It would be logical to hold the CBA share of Tier 3 in reserve, to be paid out as the members meet certain benchmarks. That way, the payment would be tied to a legitimate government purpose of accelerating the transition.
- Tier 4 would go entirely to the US taxpayers. That way, if the proceeds are large enough, it is more difficult to say the CBA received a windfall. It could be structured to begin at a very high amount.For example, Tier 4 could kick in at $50 billion. We illustrate the idea that number because that is what our colleague, Vivek Stalam, believes the auction will yield. Senator Kennedy keeps saying it could raise $60 billion. This would create the argument to CBA that Tier 4 will likely cost its members nothing while allowing Pai to argue to Kennedy that thanks to him, taxpayers will get the full benefit of the extra $10 billion. (Shhh! Don’t tell Senator Kennedy!)
Such a structure, by being a traditional FCC auction, would satisfy completely one of the two principal concerns Senator Kennedy has articulated. It would significantly satisfy the second as it could result in the more of net proceeds going to the government. It also would be easier to justify payments to non-government entities, as each payment would be in return for a specific transition related expense. It would also not affect the transition concerns of critical stakeholders, such as the content community, who in their most recent ex parte, expressed no opposition to the 300 MHz reallocation so long as certain protections were embedded in the transition. We don’t think this proposal would be eligible for a Congressional Budget Office scoring, and therefore a budget “payfor,” as the current law restricts new scoring to auctions that will occur after 2022. Scoring and a payfor for this auction would require a new act of Congress, which is difficult, but not impossible. Otherwise, the benefits of the payment to Treasury go to deficit reduction.
What about an overlay auction? Another proposal we have heard mentioned is an overlay auction in which the FCC auctions an “overlay” right to negotiate with the incumbent users to transition the use of spectrum to terrestrial mobile services. We know the idea has support among some leading conservative academics and at various times in the last few years has been discussed within the Chairman’s office. Nonetheless, we don’t think it will gain traction. First, it will yield very little money to the US Treasury and is therefore unlikely to satisfy Senator Kennedy and others. Second, we don’t think potential bidders will like it, as bidding on the right to bid in a second sales process is fraught with uncertainty.
So Is the tiered approach likely to be the new auction structure? Maybe. As far as we know, no one has directly proposed such an auction,Actually, we have a vague memory of some party proposing such an auction—we rarely have original ideas—but our quick review of the very long and large record couldn’t locate it. In any event, whatever the linage, our point is the same. 3.0 opens the door to discussing ideas that previously were not worth pushing in the eyes of most stakeholders. though it is a logical outgrowth of Charter’s legal analysis. The lack of a record for that auction format is not surprising. As the FCC majority clearly signaled that they favored a private auction, stakeholders largely focused their advocacy on how to work within that framework to accomplish their objectives.One of the most important lessons Blair learned early in his legal career, which involved occasional lobbying in the North Carolina legislature, was not to raise issues with a legislator where there was no chance of agreement. The lesson was expressed as "never try to teach a pig to sing. It won’t work and it pisses off the pig.” The lesson applies with equal wisdom in lobbying the FCC. Now, however, the doors are likely to open to new ideas. We expect better auction minds than ours to work out the best structure. Our point is not to design the auction to solve everyone’s problem but rather simply to demonstrate to investors that the question of how much money CBA members will get is not resolved simply by deciding who runs the auction. There are many ways to skin the cat.
Bottom Line: Still a Long Way from the Finish Line but Economics Are Not Reliant on CBA Running the Auction, Transition Issues Are Likely to Become More Important, and the Big Question Marks are Around Kennedy and CBA’s Bottom Line.
We don’t know what will happen next, but signs point to the FCC Chair this week kicking off Version 3.0, putting more questions out for public comment, and shooting for a final order in March or April of 2020 with an FCC run auction to commence late in the year (or early next year.) We think that in watching the debate over 3.0, investors should understand that the allocation of proceeds is still very much in play and that the transition issues that can affect a wide spectrum of stakeholders will start to become more apparent. Further, the resolution here could affect other policies and auctions, such as the CBRS auction. Uncertainty and timing about C-Band could, for example, affect the strategies of the buyers in the CBRS auction.
We also think the real wild cards now involve what would cause Senator Kennedy and CBA to come to an agreement and what would cause either side to walk from the table and go to war. We have heard from a variety of sources that if the most recent CBA plan is not accepted, their members will simply go to court and tie up the C-Band reallocation for a decade. We are dubious but acknowledge that CBA has leverage. We think they will continue to try to get the Chair back to the 2.0 track, but if and when he publicly says he is going down track 3.0, CBA will try to work within that framework. The negotiations will be far from simple and investors should be prepared for several more months of uncertainty until the core issues are resolved.
TMUS/S/DISH: Quiet Week. Enjoy.
We got nothing.That is, we got almost nothing that we think investors should care about. Sure, the states won another battle over discovery documents, this time getting some documents from Sprint that we would guess are in tension with the narrative about Sprint, without the deal, has no options to provide a provide competition to the market. But we already knew that. We learned that T-Mobile added to its legal team a lawyer whose expertise is securities enforcement and litigation, white-collar criminal defense, and complex commercial litigation, but we have no idea what he brings to the table in this litigation, other than trial experience which might include experience before the presiding Judge. But we don’t think investors should read much into that. We learned that Rob McDowell, a lawyer for T-Mobile, who spoke at a conference, thinks it’s outrageous that the union is inserting a concern about jobs into an antitrust action but also thinks states’ attorney generals should drop the case if T-Mobile promises enough jobs in their state. But again, that is for investor amusement about the kind of logical thinking presiding among some in DC these days, but it is not germane to the odds of an outcome. And we learned in House testimony that the head of the antitrust division is very proud of, and wanted to share, that he "worked in his fathers’ gas stations for eight years" while growing up. We are not sure what that has to do with “the rule of reason,” which was the topic when he brought up his employment history, or his ideas about antitrust or other criminal law enforcement generally, unless it has something to do with a fact that he neglected to mention. The Department of Labor, in 2018, ordered the family members who own the gas stations to pay, on behalf of 800 employees, $4.2 million in back pay and liquidated damages. Again, we don’t think it is investor relevant, nor did we find anything in his testimony particularly interesting or germane to the likely outcome of the litigation.
Well, mostly nothing. The only news we thought of note was that T-Mobile is trying to squash references to stock prices and international comparisons in the analysis of the states’ expert economist. Due to redactions, we cannot know the details of the analysis. It obviously is harmful to the companies’ case, but we don’t think either subject will be core to the Judge’s ruling. We think the companies are likely to lose their motion. In a trial before a Judge, as opposed to a jury which might be prejudiced by some kinds of evidence, the Judge generally allows evidence to be presented but allows the other party to fully argue why the evidence should be discounted or disregarded entirely. This filing reminds us of T-Mobile’s effort to strike from the FCC record evidence of DISH’s economist in opposition to the deal. (LINK) The FCC did not strike the economist’s report but obviously did not give it significant weight in its decision to approve the deal.
Enjoy the quiet. It won’t be so for long.
2021: Will the Labour Party Plan to Nationalize BT’s network Cause Democrats to Consider Similar Steps?
This past week, Britain's opposition Labour Party announced that if it wins the majority in the upcoming election, it plans to nationalize BT's broadband network to provide free internet for all. Some investors have asked whether that will cause Democrats running for President to consider similar steps.
The answer is no.
First, no Democrat, with the possible exception of Sanders, sees Jeremy Corbyn as a role model for anything. Corbyn has suggested nationalizing a number of other sectors but that has not led to Democratic imitations in the US. And if, as expected, Labour loses in the December election despite the Conservatives evident weaknesses, Democrats will be even more reluctant to embrace Labour’s losing strategy.
Second, the market structure in the UK is quite different, as cable is far more limited in its reach, making the logic of nationalization in the United States even less compelling and the economics even more difficult.We are not saying that in England there is either a compelling logical or economic case for nationalization. We are just saying that as weak as we think the case is there, it is even weaker in the US.
Third, the history of the sectors is materially different. BT was a public enterprise until 35 years ago. Neither AT&T nor the cable carriers were ever public enterprises. Thus, while some in England might agree with the nostalgic sentiment to “make BT ours again,” there is no such history or nostalgia in the US.
Again, we think, as we wrote in our analysis of a potential Warren Presidency specifically on the telecom, cable and media sectors, investor concerns are generally misplaced. (LINK)
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