competition – Techdirt
from the nothing-we-say-is-ever-actually-real dept
In the wake of the Sprint T-Mobile merger, data suggests that wireless carriers immediately stopped trying to compete on price (exactly what deal critics had warned the Trump administration would happen when you reduce sector competition).
Recently, T-Mobile imposed another $3-$5 per month price hike on most of its plans — including customers who believed they were under a “price lock” guarantee thanks to a 7-year-old promotion promising that their price would never change. But when users explored the fine print of that agreement it indicated that by “price lock,” T-Mobile actually meant it would pay your final monthly bill if the carrier raised the price and impacted customers decided to cancel. In other words, bullshit.
T-Mobile was flooded with complaints and lawsuits over the practice, but it has so far faced absolutely no accountability for lying to users. Now T-Mobile is back with yet another, new “price lock” guarantee that in no way locks in your pricing.
T-Mobile’s previous, shitty plans at least had “taxes and fees” included. This new promotion doesn’t do that, ensuring that T-Mobile can impose all manner of dodgy fake fees to jack up the advertised price and ignore its promise to not raise prices:
“This will make the plans cost more initially than customers might expect, and it gives T-Mobile wiggle room to raise prices during the five years of the price guarantee since it could increase any fees that are tacked onto the new plans. The fine print in today’s press release describes taxes and fees as “exclusions” to the price guarantee.”
U.S. telecoms have a long and proud history of imposing all sorts of bullshit and fake fees — many disguised to pretend they’re coming from government — to jack up the below the line costs. The Biden FCC and FTC had been taking some steps to combat that, but the second Trump administration has effectively abandoned consumer protection entirely. You know, for populism (?).
So instead of cracking down on telecoms that lie about pricing, FCC boss Brendan Carr spends his days harassing companies that aren’t racist and sexist enough, and bullying media companies that don’t kiss Donald Trump’s ass.
Filed Under: 5g, competition, fcc, price lock, price lock guarantee, prices, telecom, uncarrier, wireless
Companies: t-mobile
Back in 2021, Apple mostly won the antitrust case that Epic brought against it, and the Ninth Circuit largely agreed. The court rejected most claims about Apple’s App Store being an illegal monopoly. The company just had to make one small change: let developers tell users they could make purchases elsewhere. Simple enough.
Instead, Apple apparently decided that the best response was to design elaborate schemes to make that “elsewhere” as scary and expensive as possible, hide evidence of those schemes from the court, and then lie under oath about all of it. This strategy has worked out about as well as you’d expect, leading to what may be one of the most scathing judicial opinions you’ll ever read.
As we noted at the time, this seemed like the correct outcome. Many of the antitrust claims from Epic seemed ridiculous and the court agreed, but the provisions forbidding app developers from even communicating to users that it was possible to do non in-app purchases seemed extremely restrictive and problematic.
Apple should have been happy with this result. But Apple apparently was not. Yesterday, District Court Judge Yvonne Gonzalez Rogers issued one of the most scathing rulings I’ve ever seen a court issue, calling out what appears to be Apple’s willful decision to disobey the injunction and play games to avoid doing the little bit it was required to do.
Let’s let the judge take it from here:
To summarize: One, after trial, the Court found that Apple’s 30 percent commission “allowed it to reap supracompetitive operating margins” and was not tied to the value of its intellectual property, and thus, was anticompetitive. Apple’s response: charge a 27 percent commission (again tied to nothing) on off-app purchases, where it had previously charged nothing, and extend the commission for a period of seven days after the consumer linked-out of the app. Apple’s goal: maintain its anticompetitive revenue stream. Two, the Court had prohibited Apple from denying developers the ability to communicate with, and direct consumers to, other purchasing mechanisms. Apple’s response: impose new barriers and new requirements to increase friction and increase breakage rates with full page “scare” screens, static URLs, and generic statements. Apple’s goal: to dissuade customer usage of alternative purchase opportunities and maintain its anticompetitive revenue stream. In the end, Apple sought to maintain a revenue stream worth billions in direct defiance of this Court’s Injunction.
In stark contrast to Apple’s initial in-court testimony, contemporaneous business documents reveal that Apple knew exactly what it was doing and at every turn chose the most anticompetitive option . To hide the truth, Vice-President of Finance, Alex Roman, outright lied under oath . Internally, Phillip Schiller had advocated that Apple comply with the Injunction, but Tim Cook ignored Schiller and instead allowed Chief Financial Officer Luca Maestri and his finance team to convince him otherwise. Cook chose poorly . The real evidence, detailed herein, more than meets the clear and convincing standard to find a violation. The Court refers the matter to the United States Attorney for the Northern District of California to investigate whether criminal contempt proceedings are appropriate .
Cook chose poorly? Yikes. Being referred for criminal contempt? Double yikes.
This is an injunction, not a negotiation . There are no do-overs once a party willfully disregards a court order. Time is of the essence. The Court will not tolerate further delays. As previously ordered, Apple will not impede competition. The Court enjoins Apple from implementing its new anticompetitive acts to avoid compliance with the Injunction. Effective immediately Apple will no longer impede developers’ ability to communicate with users nor will they levy or impose a new commission on off-app purchases.
Ouch.
Apple has a history of engaging in malicious compliance to regulatory requirements, but this seems particularly egregious.
The court’s ruling reveals a deliberate three-part strategy by Apple: First, design a system that would appear compliant while actually maintaining their monopoly. Second, hide evidence of this strategy through dubious privilege claims. And finally, when caught, lie about it under oath.
The deliberate nature of Apple’s defiance is perhaps best captured in internal communications about their “scare screen” strategy.
In Slack communications dated November 16, 2021, the Apple employees crafting the warning screen for Project Michigan discussed how best to frame its language. (CX-206.) Mr. Onak suggested the warning screen should include the language: “By continuing on the web, you will leave the app and be taken to an external website” because “‘external website’ sounds scary, so execs will love it.” (Id. at .2.) From Mr. Onak’s perspective, of the “execs” on the project, Mr. Schiller was at the top. (Feb. 2025 Tr. 1340:4–6 (Onak).) One employee further wrote, “ to make your version even worse you could add the developer name rather than the app name.” (CX-206.4.) To that, another responded “ooh – keep going.”
Again, Apple decided on the most anticompetitive option, that is, the “even worse” option of including the developer’s name rather than the app name … All of this was hidden from the Court and not revealed in the May 2024 evidentiary hearings.
Apple folks tried to claim that when they said “scary” they didn’t mean “scary” and really said that “scary” was “a term of art” rather than what everyone knows it means:
Mr. Onak testified that “in term of UX writing, the word ‘scary’ doesn’t . . . mean the same thing as instilling fear.” (Feb. 2025 Tr. 1340:10–12 (Onak).) Rather, “scary” is a term of art that “means raising awareness and caution and grabbing the user’s attention.” (Feb. 2025 Tr. 1340:13– 15 (Onak).) Mr. Onak repeatedly asserted that the team’s goal was simply “to raise caution so the user would have all the facts so that they can make an informed decision on their own.” (Feb. 2025 Tr. 1340:22–1341:2 (Onak).) Mr. Onak’s testimony was not credible and falls flat given reason, common sense, and the totality of the admitted exhibits . The designers’ discussions contextualize their use of the word “scary” to indicate its ordinary meaning and, most applicable here, indicate the goal of deterring users as much as possible from completing a linked-out transaction.
Beyond the psychological manipulation through the UI, Apple’s strategy centered on implementing a 27% commission on outside purchases — just a 3% discount from their usual rate for on-platform purchases — while knowing full well this would make external payment options economically unviable for developers.
Apple senior management held a meeting after the injunction was upheld by the Ninth Circuit, in which notes were taken, discussing two options: one where they didn’t charge for off-platform purchases (but which “would restrict the placement and appearance” of any links to off-AppStore purchasing options). The other one, which they went for, was to let them place the info more broadly, but take a 27% cut, rather than a 30% cut.
Unfortunately for Apple, the notes for that meeting noted that a reason to reject the first proposal was that it would “create competitive pressure.” As the judge notes: that was exactly the point of the injunction, to create competitive pressure. So, Apple’s meeting to figure out how to minimize competitive pressure can be seen as seeking to get around the injunction.
And then, on top of that, Apple went with a combination of both proposals to make it designed to stymie the injunction’s purpose. They included the link-out restrictions from the first proposal AND the commission from the second proposal.
Even more damning, Apple’s internal notes reveal that Apple (most likely correctly) predicted that the 3% discount on commissions wouldn’t be economically viable, because the cost to run your own payment setup would likely exceed that 3%. And, Apple already knew that no one would sign up for this because they had used similar off-site commission programs in Korea and the Netherlands:
At the time, Apple also knew of the virtually nonexistent adoption rates of the Netherlands and Korea programs. Those, similar to the at-issue program, additionally suggested to Apple the non-viable economics of the proposed program. See Feb. 2025 Tr. 1407:1-5 (“Q. [F]or example, as of October 2022, ten months into the Netherlands program and four months into the Korea program, only one developer had signed up for alternative payments across the two programs. A. That seems roughly correct, yes.”) (Oliver).
If you only have one developer, you don’t have to say “roughly correct.” There’s no estimating there.
But amazingly, it gets worse. Apple’s internal documentation more or less admits that they might be violating the injunction with this approach:
Crucially, at this point, Apple’s notes reflect uncertainty about whether it could in fact impose a commission without violating the Injunction. In one slide deck, Apple’s notes explain that “[i]f we decided and had the ability to charge a commission, we believe there would be very little developer adoption of link-out, assuming a scenario where we would give a cost of payments discount at 3%.” (CX-859.33 (emphasis supplied).) Those same notes indicate that Apple planned to “[c]ome up with a couple of models in the spectrum of what we think the judge will accept” but to “[s]tart with the minimum.”
The judge also points out that the exec who was pushing for the “no commission” approach, Phil Schiller, had closely followed the trial and read the injunction, while the execs pushing for the sketchy commission approach had not.
Prior to the June 20 meeting, there were individuals within Apple who were advocating for a commission, and others advocating for no commission. (Feb. 2025 Tr. 1521:3–12 (Oliver).) Those advocating for a commission included Mr. Maestri and Mr. Roman. (Id. 1522:3–10 (Oliver).) Mr. Schiller disagreed. (Id. 1521:13–18 (Oliver).) In an email, Mr. Schiller relayed that, with respect to the proposal for “a 27% commission for 24 hours,” “I have already explained my many issues with the commission concept,” and that “clearly I am not on team commission/fee.” (CX-224.1.)29 Mr. Schiller testified that, at the time, he “had a question of whether we would be able to charge a commission” under the Injunction, a concern which he communicated. (Feb. 2025 Tr. 1177:24–1178:9 (Schiller).) Unlike Mr. Maestri and Mr. Roman, Mr. Schiller sat through the entire underlying trial and actually read the entire 180-page decision. That Messrs. Maestri and Roman did neither, does not shield Apple of its knowledge (actual and constructive) of the Court’s findings.
When faced with judicial scrutiny of these practices, Apple didn’t just defend its actions — it launched an extraordinary campaign of document suppression and delay tactics that would ultimately backfire spectacularly.
As testimony unfolded, and Apple attempted to justify its response, the Court became increasingly concerned that Apple was not only withholding critical information about its business decision for complying with the Injunction, but also that it had likely presented a reverse-engineered, litigation-ready justification for actions which on their face looked to be anticompetitive. The Court immediately ordered Apple to produce all injunction-compliance related documents
And then Apple appeared to play games in providing the demanded documents:
Apple engaged in tactics to delay the proceedings. The Court later concluded that delay equaled profits . By September 30, 2024, Apple represented that it had produced around 89,000 documents out of the 1.5 million it had reviewed and expected to produce a few thousand more by October 7, 2024. (Dkt. No. 1024.) Apple, however, had asserted privilege over more than a third of responsive documents….
Magistrate Judge Hixon largely found Apple’s privilege claims to be unsubstantiated after reviewing eleven exemplar documents (characterized by Epic as evidence of Apple’s overreach). (Dkt. No. 1056.) Apple used this decision to delay further and “offered” to re-review all 57,000 documents for which it claimed privilege in full or in part. Ultimately, Apple withdrew approximately 42.1% of its privilege claims. Although Apple now tries to recast its re-review as “of its own accord,” that framing belies the reality that the documents should have never been withheld in the first instance. (Dkt. No. 1151 at 5–6.) Ultimately, Epic and Apple hired three special masters to review Apple’s privilege claims after its re-review.
But Apple’s strategy of obstruction eventually crumbled, revealing something even more serious: executives appearing to deliberately lie under oath.
The judge describes how Apple hired some consultants, “Analysis Group” or “AG,” to conduct research on the value of their platform to try to find justification for the 27% costs charged to developers. They then told the court that they used that analysis as the basis of what to charge, even though the notes now prove that the decision was actually made about six months earlier. In other words, Apple execs appear to have lied under oath.
On top of that, Apple execs claimed that they hadn’t evaluated if external costs of a developer running their own payment setup would exceed the 3% discount, even though it has since come out that they very much did do that analysis, and it was a key part of the decision to only discount commissions by 3%. More lies:
Despite its own considerable evaluation, during the first May 2024 hearing, Apple employees attempted to mislead the Court by testifying that the decision to impose a commission was grounded in AG’s report . (See, e.g., May 2024 Tr. 544:16–24 (Oliver); see also Dkt. No. 1324, Apple Trial Brief at 12.) The testimony of Mr. Roman, Vice President of Finance, was replete with misdirection and outright lies . He even went so far as to testify that Apple did not look at comparables to estimate the costs of alternative payment solutions that developers would need to procure to facilitate linked-out purchases.
The Court finds that Apple did consider the external costs developers faced when utilizing alternative payment solutions for linked out transactions, which conveniently exceeded the 3% discount Apple ultimately decided to provide by a safe margin. (See CX-265.27 (Apple’s estimates of external costs for developers); Feb. 2025 Tr. 1627:15–1628:10 (Vij) (discussing external costs).) Apple did not rely on a substantiated bottoms-up analysis during its months-long assessment of whether to impose a commission, seemingly justifying its decision after the fact with the AG’s report.
Also, given that the decision to charge 27% commissions happened in July of 2023, and the AG report was only delivered in January of 2024 (well after the decision was made), the same Apple exec then apparently lied and claimed the commission decision was made after the report was delivered, which the now-revealed notes show was just blatantly false:
Mr. Roman did not stop there, however. He also testified that up until January 16, 2024, Apple had no idea what fee it would impose on linked-out purchases:
Q. And I take it that Apple decided to impose a 27 percent fee on linked purchases prior to January 16, 2024, correct?
A. The decision was made that day.
Q. It’s your testimony that up until January 16, 2024, Apple had no idea what — what fee it’s going to impose on linked purchases?
A. That is correct. (May 2024 Tr. 202:12–18 (Roman).)
Another lie under oath: contemporaneous business documents reveal that on the contrary, the main components of Apple’s plan, including the 27% commission, were determined in July 2023.
Neither Apple, nor its counsel, corrected the, now obvious, lies. They did not seek to withdraw the testimony or to have it stricken (although Apple did request that the Court strike other testimony). Thus, Apple will be held to have adopted the lies and misrepresentations to this Court.
Ouch.
There’s a lot more as well, but the judge is rightly pissed off. She has issued an injunction making it pretty clear that Apple has to knock off all its tricks:
PERMANENTLY RESTRAINS AND ENJOINS Apple Inc. and its officers, agents, servants, employees, and any person in active concert or participation with them, from:
- Imposing any commission or any fee on purchases that consumers make outside an app, and as a consequence thereof, no reason exists to audit, monitor, track or require developers to report purchases or any other activity that consumers make outside an app;
- Restricting or conditioning developers’ style, language, formatting, quantity, flow or placement of links for purchases outside an app;
- Prohibiting or limiting the use of buttons or other calls to action, or otherwise conditioning the content, style, language, formatting, flow or placement of these devices for purchases outside an app;
- Excluding certain categories of apps and developers from obtaining link access;
- Interfering with consumers’ choice to proceed in or out of an app by using anything other than a neutral message apprising users that they are going to a third-party site; and
- Restricting a developer’s use of dynamic links that bring consumers to a specific product page in a logged-in state rather than to a statically defined page, including restricting apps from passing on product details, user details or other information that refers to the user intending to make a purchase.
Normally, I would say some of those go a bit far in limiting certain things that Apple would be expected to do, but… given just how much Apple tried to lie and mislead the court, it’s kinda what you’d expect. It also says it will not put a stay on this assuming Apple appeals “given the repeated delays and severity of the conduct.”
While Apple also has to pay for the special master that it and Epic had to bring in to review the falsely claimed “privileged” documents, there aren’t any other sanctions (nor did Epic seek them). And that’s why there’s a criminal referral.
What makes this ruling so remarkable isn’t just the scathing language or even the criminal referral — it’s the sheer pointlessness of Apple’s defiance. The company had won almost all of this case. All it had to do was make one small change. Instead, its executives chose to lie, obstruct, and treat the judicial system with contempt. Even with Tim Cook’s recent cozying up to Trump and the Trump/Bondi Justice Department’s tendency to view justice through the lens of personal loyalty (which might help make the criminal referral disappear), it’s hard to understand what Apple thought it would gain through such brazen actions.
Yes, Apple managed to drag out its monopoly rents on app commissions for a bit longer. But it could have crafted a more open system that would have satisfied the court while preserving significant control over its platform (along with the associated commissions) — all without executives potentially facing criminal contempt charges. The short-term profits from delay hardly seem worth the cost of credibility with courts and regulators going forward.
As Judge Gonzalez Rogers put it simply: Tim Cook chose poorly.
Filed Under: alex roman, antitrust, app store, competition, contempt, criminal contempt, in app purcases, luca maestri, obstuction, phil schiller, tim cook, yvonne gonzalez rogers
Companies: apple
from the oligarchs-r-us dept
Wed, Apr 16th 2025 05:30am - Karl Bode
The first Trump FCC tried to give Musk nearly a billion dollars to deliver expensive Starlink access to some traffic medians and airport parking lots. The Biden FCC clawed back those subsidies, (correctly) worrying that the service couldn’t deliver consistent speeds, and arguing (also correctly) that if we’re going to spend taxpayer money on broadband, affordable fiber (and fixed wireless and 5G) should be prioritized.
Elon Musk (who purportedly hates subsidies… while gobbling them up) and Republicans threw a giant, protracted hissy fit, falsely claiming that the Biden administration was unfairly targeting Musk for retribution. They held a bunch of show hearings and seeded right wing media with bottomless whining about how a billionaire didn’t get showered with billions in taxpayer subsidies. You know, populism (?).
So a big part of the second Trump term is making sure that a full-diapered Musk gets all the Starlink taxpayer subsidies he thinks he’s owed. That includes trying to hijack a big chunk of the $42.5 billion in infrastructure bill broadband subsidies headed to the states and redirect it to Elon, and away from better, cheaper, more local broadband providers.
But it also apparently involves having the Trump’s head of the FCC, Brendan Carr, abuse his “professional” position to behave like a used car salesman for Starlink. This week that involved Carr trying to scare the whole of Europe toward using Starlink, by falsely claiming that the only alternative is scary communism:
“FCC chair Brendan Carr told the Financial Times that “allied western democracies” needed to “focus on the real long-term bogey: the rise of the Chinese Communist party”.
“If you’re concerned about Starlink, just wait for the CCP’s version, then you’ll be really worried,” he said.
Carr intentionally ignores the fact that, scared away by Musk’s erratic and often-unhinged behavior, countries like Ukraine and Germany have increasingly been moving toward using Eutelsat’s OneWeb, a European Starlink Low Earth Orbit (LEO) satellite competitor that’s still trying to ramp up satellite launches.
Europe is cooking up its own alternatives, which Carr and Musk obviously don’t like. Amazon is also working on Project Kuiper. Canadian Telesat hopes to join the fun. So the idea that Europe will only have two choices for LEO satellite communications — Starlink or communism — is just Carr engaging in xenophobic scare mongering to help Musk sell satellite dishes.
It’s also worth noting that Carr routinely likes to fear-monger about China, then fall flat on his face when it comes to real-world policy solutions for real problems.
For example, he spent years and years hyperventilating about TikTok (a company he doesn’t regulate), then went obediently quiet when Trump eased off a ban to the benefit of his billionaire buddy. He’s also been absent on any push for a useful U.S. privacy law. Carr spent years demanding telecoms rip out Huawei network gear from their networks, only to go quiet when Congress forgot to fund the project.
Carr has also been super keen to help Trump defang federal governance and corporate oversight to the detriment of U.S. security and privacy.
Like the unprecedented recent Chinese hacking of U.S. telecoms made possible, in part, by the kind of mindless deregulation Carr and his friends at AT&T, Verizon, and Comcast prefer. He’s spent more time threatening telecoms for not being racist enough than he has on protecting Americans from Chinese hackers. Carr is pure artifice. A clumsy little kid’s version of what a serious policymaker might be.
It’s also worth reiterating that contrary to what many Republicans and c-tier comedians turned fashy-apologist podcasters imply, Starlink is not magic. And it comes with a growing list of caveats.
The technology has been criticized for harming astronomical research and the ozone layer. Starlink customer service is largely nonexistent. It’s too expensive for the folks most in need of reliable broadband access. The nature of satellite physics and capacity means slowdowns and annoying restrictions are inevitable, and making it scale to permanently meet real-world demand is expensive and not guaranteed.
So if you’re going to dole out taxpayer subsidies, it still makes sense to prioritize driving fiber and wireless into most places, filling in the remaining gaps with satellite. And even then, when you choose a satellite option, you probably want to go the one not being run by a pudding-brained fascist who spends all day sharing racist memes and conspiracy theories on his own ego-boosting propaganda website.
Filed Under: brendan carr, china, competition, elon musk, europe, hacking, leo, privacy, satellite, security, starlink
from the maybe-don't-give-the-giant-racist-more-money dept
Thu, Apr 10th 2025 08:04pm - Karl Bode
SpaceX’s Starlink service can be a big improvement for those completely out of range of broadband access. But contrary to what many Republicans and c-tier comedians turned fascism apologist podcasters imply, Starlink is not magic. And it comes with a growing list of caveats. Including the increasingly unhinged behavior and far right political alliances of its conspiratorial, pudding-brained CEO.
Elon Musk’s growing power over the fledgling LEO (low Earth orbit) satellite sector has long been worrying global military leaders, especially after one incident a few years ago where Musk restricted Ukraine’s access to the service near Crimea because he personally opposed Ukraine’s military aims (defending itself from unprovoked invasion).
And while it took a while, there’s evidence Europe and Ukraine are finally starting the necessary migration off of Elon Musk’s satellite communications platform. Last week Reuters reported that Berlin has been paying for Ukraine’s access to France’s Eutelsat for much of the last year. Initial numbers are low, but they’re hoping to ramp up quickly:
“[Eutelsat’s chief executive Eva] Berneke said there were fewer than a thousand terminals connecting users in Ukraine to Eutelsat’s network, which is a small fraction of the roughly 50,000 Starlink terminals Ukraine says it has, but she said she expected the figure would rise.
“Now we’re looking to get between 5,000 and 10,000 there relatively fast,” she said, adding it could be “within weeks”.
Eutelsat’s OneWeb division is Starlink’s primary rival in the low-Earth orbit satellite space. The company has around 650 LEO satellites in orbit at approximately 1,200 km (750 mi) altitude, while Starlink has a notable early advantage with over 7100 LEO satellites in orbit. Other companies, like Bezos’ Project Kuiper, are poised to enter the historically challenging market with high operational costs.
Elon Musk’s increasingly unhinged behavior continues to be a wonderful marketing opportunity for companies that want to provide alternatives to people who prefer their companies with a skosh less racism and fascism. Trump’s annoying tariffs have also been driving foreign governments ( like Canada) away from Starlink, though it’s all happening slower than many would like.
Don’t feel bad for Elon Musk though. Potentially unsecured Starlink terminals were recently attached to the White House roof, creating major new potential cybersecurity risks. U.S. Republicans are also trying to hijack the $42.5 billion U.S. infrastructure bill broadband grant program and redirect as much of the money as possible to Musk.
The problem: Starlink here in the States is expensive, increasingly congested, ruins astronomical research, harms the ozone layer, and lacks the capacity to fully address rural American broadband problems. And federal grant money directed toward Musk is money directed away from more popular, local, affordable alternatives like cooperative fiber or locally run fixed wireless options not run by conspiratorial bigots.
Filed Under: alternatives, broadband, competition, elon musk, high speed internet, low earth orbit, satellite, ukraine
from the prepare-for-things-to-get-dumber dept
Wed, Apr 2nd 2025 01:48pm - Karl Bode
We’ve noted more times than I can’t count that the push to ban TikTok was never really about protecting American privacy. If that were true, we would pass a real privacy law and craft serious penalties for companies and executives that play fast and loose with sensitive American data.
It was never really about propaganda. If that were true, we’d take aim at the extremely well funded authoritarian propaganda machine and engage in content moderation of race-baiting political propaganda that’s filling the brains of young American men with pudding and hate.
Banning TikTok was never really about national security. If that were true, we wouldn’t be dismantling our cybersecurity regulators, hosting sensitive military chats over Signal with journalists, voting to cement utterly incompetent knobs in unaccountable roles across military intelligence, and letting run-amok data brokers sell personal info to global governments (including our own).
The push to Facebook was about ego, money, and information control. Ego; Trump got mad at TikTok videos making fun of his small crowd sizes. Money: Facebook worked tirelessly to spread bogus moral panics about TikTok in order to kill off a competitor they couldn’t out-innovate. Control: the GOP wants to own TikTok so they can ensure it’s friendly to an essential cornerstone of party power — their propaganda.
Enter the fine folks at (Trump friendly) Andreessen Horowitz, who are emerging as a late-stage bidder for a big chunk of whatever winds up being left of TikTok alongside (Trump friendly) Oracle:
“US venture capital giant Andreessen Horowitz is in talks to invest in social media platform TikTok as part of an effort led by Donald Trump to wrest control of the popular video app from its Chinese owners. The venture capital group, whose co-founder Marc Andreessen is a vocal supporter of the US president, is in talks to add new outside investment that will buy out TikTok’s Chinese investors, as part of a bid led by Oracle and other American investors to carve it out of its parent company ByteDance.”
Thanks to America’s silly and performative ban, ByteDance has until April 5 to sell TikTok to U.S. controlled companies. There’s still no word on what a finalized deal will look like, and ByteDance has had strong reservations in including the company’s engagement algorithms as part of any deal.
We’ve kind of come full circle here. If you recall, Trump’s big plan during his first term was to transfer ownership of TikTok to right wing-friendly companies Oracle and Walmart. That plan ultimately fell apart, and Trump has subsequently waffled back and forth on what to do, in part because he was trying to appease right wing billionaire donor and ByteDance investor Jeffrey Yass.
Marc Andreessen, who has become increasingly incoherent as he prostrates himself and his empire to King Dingus, clearly wants TikTok ad money, but he also wants information control. Andreessen is already on the board of Meta and one of the investors in Elon’s takeover of Twitter. If he grabs a large stake in TikTok, an overt authoritarian will have meaningful power over the country’s three biggest social media platforms. That is, you know, bad for a long list of reasons that should be obvious.
Other suitors may not be much better. As I was writing this, news emerged that Jeff Bezos (the guy currently making the Washington Post more friendly to authoritarian ideology and hostile to anyone who disagrees) is also putting in a bid for Amazon to acquire TikTok. If his bumbling at WAPO is any indication, his ownership of TikTok wouldn’t be much better for free expression.
Modern U.S. authoritarians don’t want major popular tech platforms engaging in content moderation of right wing propaganda and disinformation, a cornerstone of Trump power (since their actual policies, like letting shitty corporations do whatever they want, dismantling civil and labor rights, and giving billionaires more tax cuts, are broadly unpopular amongst the plebs).
But the TikTok ban really can’t be separated by the broader GOP quest to dominate the entirety of modern media. You might recall how the GOP spent years successfully bullying tech companies into going soft on race-baiting right wing propaganda, often under the pretense they were doing serious adult business on antitrust reform or trying to combat ( completely bogus) “censorship” of Conservative ideologies.
There was, if you recall, a whole three year news cycle where major news outlets propped up the myth that this wasn’t about control, propaganda, and forcing unpopular right wing policies down everybody’s throat, it was about reining in corporate power and “holding big tech accountable.” These GOP efforts were, time and time again, portrayed in the press as serious, adult, good faith policymaking.
A few years later and everything is completely fucked, regulators are either being stripped for parts or being used to harass companies for not being racist enough, all our biggest tech companies have folded on moderating right wing racism, right wing propaganda is worse than ever, journalism is dying, civil rights and free speech face existential threats, and federal corporate oversight is effectively dead.
Really a great job on all fronts, from policymakers to U.S. journalism. Everybody really nailed it.
TikTok always heavily trafficked in a lot of right wing engagement bait because, as an amoral algorithmic engagement machine, they like to shovel more of the stuff you already like your direction. But at the same time, I personally found I was more likely to find left wing content on TikTok than I would on, say, Facebook’s reels. Ultimately, TikTok has veered even harder right as it tried to appease U.S. authoritarians.
However right wing friendly you think TikTok is now, it will be notably worse under Oracle and Andreessen Horowitz, and far more likely to take action against content and creators Trumpism doesn’t like. All in service to authoritarian control, and chasing where the real money is in America media right now: telling young angry men all of their worst lizard-brained impulses are correct.
Filed Under: authoritarian, competition, content moderation, corruption, disinformation, donald trump, jeff bezos, marc andreessen, propaganda, social media, tiktok ban
Companies: amazon, andreessen horowitz, bytedance, oracle, tiktok
from the look-at-the-big,-tough-guy-doing-big,-tough-guy-things dept
Wed, Mar 26th 2025 05:31am - Karl Bode
Instead of doing things like protecting consumers or market competition, Trump FCC boss Brendan Carr has spent his first few months in office abusing agency authority to threaten companies that refuse to kiss the Trump administration’s ass. A cornerstone of those efforts has been to leverage merger approvals to get companies to support core administration policies like… being more racist.
For example, he’s launched phony inquiries into Verizon because the company wasn’t racist enough for Carr’s liking. He’s launched similar “investigations” into Comcast because the company still paid fleeting lip service to the value of diversity in hiring. And he’s harassed CBS/Paramount with fake investigations based on completely bogus accusations of being “biased against Conservatives.”
All three companies have something in common: they’re hoping the FCC approves planned mergers and further (usually harmful) market consolidation. Verizon’s looking for approval for its $20 billion merger with Frontier. Comcast is broadly rumored to be eyeing a merger with either T-Mobile or Charter (or both). CBS/Paramount is looking for regulatory approval of its $8 billion merger with Skydance.
Carr’s been pretty cocky since he got into office. Normally if you’re going to abuse government power like this you’d apply a little subtlety to it. But in this case Carr is openly crowing to the press that they have to bow to Trumpism if they want their (often pointless and shitty) mergers to be approved. Again, for now that mostly involves demands that they be more racist:
“Any businesses that are looking for FCC approval, I would encourage them to get busy ending any sort of their invidious forms of DEI discrimination.”
U.S. media giants, hopeful of getting tax cuts and deregulation and merger approvals (and afraid of losing access), are more than happy to oblige. That involves cheerfully couching a blatantly racist attack on popular civil rights under the nomenclature of “DEI”:
Trump authoritarians hijacked the “DEI” term because they’re hoping to conflate the elimination of bare-bones corporate inclusivity initiatives with the elimination of popular civil rights reforms. It allows them to normalize their bigotry and disguise it as an act of essential efficiency. And our biggest consolidated media companies, looking for favor, access, deregulation, and tax breaks, are more than happy to comply.
All three investigations into all three companies are utterly baseless harassment. Not a single one of the three have actually done anything wrong. But when you read through any major outlet story on this subject, that’s not made clear, and Carr and the Trump administration’s racism are framed as ordinary and valid complaints. The normalization is on display pretty much everywhere you look, and it’s embarrassing.
Carr of course tries to pretend all of this bullshit is serious, legal, adult policy making, and the press is generally happy to play along. See how Deadline frames the issue, for example:
“Under the law, Carr said, the FCC can only “move forward and approve a transaction if we find that doing so serves the public interest,” Carr said. “If there’s businesses out there that are still promoting invidious forms of DEI discrimination, I really don’t see a path forward where the FCC could reach the conclusion that approving the transaction is going to be in the public interest.”
That’s where a useful journalism organization would indicate that Carr doesn’t really have a history of “serving the public interest.” He’s generally been the textbook definition of regulatory capture, constantly rubber stamping the policies of the giant companies he overseas (like AT&T) and undermining consumer protection. It’s also where a functional journalism industry would point out that Carr’s claim that civil rights reforms are “invidious discrimination” are bullshit, and the motivation is rank bigotry.
Instead, they cower like little frightened deer, much to Carr’s delight. It is a conscious choice for media organizations and journalists to parrot bad-faith clowns entirely unskeptically and frame their actions as “serious policy.”
As I predicted repeatedly, unconstrained by re-election and more fully propped up by our broken court system, Trump 2.0 is so much, much worse than Trump 1.0.
Trump 1.0 involved “boring” old captured regulators rubber stamping all manner of shitty mergers (usually without reading or caring about the actual market harms). Trump 2.0 involves approving those same mergers, but not before abusing the approval process to demand companies be even shittier than they already were. Feckless giants like Comcast will be particularly happy to oblige.
Filed Under: approval, bigotry, brendan carr, civil rights, competition, dei, fcc, journalism, media, mergers, racism, regulators
Companies: comcast
from the enhittify-ALL-the-things! dept
Mon, Mar 24th 2025 05:30am - Karl Bode
Now that subscriber growth has slowed, streaming TV giants have taken the predictable turn of making their services shittier and more expensive to deliver Wall Street (impossibly) unlimited quarterly revenue growth.
That means higher prices, annoying new surcharges, greater restrictions, more layoffs, more cut corners, worse customer service, more limited catalogs, lower quality engagement-bait content, and a lot of pointless mergers designed specifically to goose stock valuations and provide big fat tax breaks.
The king of this enshittification era in streaming has been the AT&T–>Warner Brothers–>Discovery series of mergers, which resulted in no limit of brand degradation, layoffs, and absolute chaos in the empty pursuit of unlimited scale. The dumb merger already killed Mad Magazine, HBO, and countless television shows, driving millions of subscribers to the exits.
And the hits keep on coming. Last week users began grumbling after Max executives decided to delete the entire 1930-1969 run of classic Looney Tunes shorts from the streaming company’s catalog. Because kids’ programming doesn’t sell quite as well as homogenized reality TV dogshit, executives have decided that these old classics are no longer relevant to the public interest.
This is well in line with other similar decisions at other streaming giants, as we saw when Paramount (CBS) recently pulled decades of MTV music journalism, and years of Comedy Central comedy programming, out of circulation. They do this largely because they don’t want to continue paying royalties, and the men in charge have no respect for any sort of collective history. They’re purely extractive animals.
As Jeremy Smith at Slashfilm notes, it is technically an act of cultural vandalism:
“As it currently stands, if you want to watch classic Looney Tunes, your only option is physical media. Warner Bros. Discovery says this is because children’s entertainment doesn’t drive subscriptions (it gave the same excuse for nuking “Sesame Street”), which is obviously a lie given that a good chunk of the new Looney Tunes cartoons, much of which is explicitly aimed at children, is still streaming.”
It’s bad enough that guys like Warner Brothers Discovery CEO David Zaslav are fixated on purposeless consolidation, impossible growth, and mindlessly cutting corners. But they’re not particularly competent, either. Their strategies aren’t working in any real sense. They’re not creating quality art, interesting content, longstanding businesses — and their customers are headed for the exists.
Companies like Warner Brothers Discovery have become weird caricatures of sensible business practices. Purely extractive, entirely incoherent, all led by men who aren’t particularly competent. If Zaslav was remotely clever and worth his outsized compensation, the company wouldn’t be desperately waiting to see whether this summer’s Superman retread stands between it and business oblivion.
Filed Under: cartoons, competition, enshittification, looney tunes, max, mergers, quality, streaming, tv, video
Companies: warner bros. discovery
from the this-is-not-the-solution-you're-looking-for dept
California legislators have begun debating a bill (A.B. 412) that would require AI developers to track and disclose every registered copyrighted work used in AI training. At first glance, this might sound like a reasonable step toward transparency. But it’s an impossible standard that could crush small AI startups and developers while giving big tech firms even more power.
A Burden That Small Developers Can’t Bear
The AI landscape is in danger of being dominated by large companies with deep pockets. These big names are in the news almost daily. But they’re far from the only ones – there are dozens of AI companies with fewer than 10 employees trying to build something new in a particular niche.
This bill demands that creators of any AI model—even a two-person company or a hobbyist tinkering with a small software build—identify copyrighted materials used in training. That requirement will be incredibly onerous, even if limited just to works registered with the U.S. Copyright Office. The registration system is a cumbersome beast at best—neither machine-readable nor accessible, it’s more like a card catalog than a database—that doesn’t offer information sufficient to identify all authors of a work, much less help developers to reliably match works in a training set to works in the system.
Even for major tech companies, meeting these new obligations would be a daunting task. For a small startup, throwing on such an impossible requirement could be a death sentence. If A.B. 412 becomes law, these smaller players will be forced to devote scarce resources to an unworkable compliance regime instead of focusing on development and innovation. The risk of lawsuits—potentially from copyright trolls—would discourage new startups from even attempting to enter the field.
A.I. Training Is Like Reading And It’s Very Likely Fair Use
A.B. 412 starts from a premise that’s both untrue and harmful to the public interest: that reading, scraping or searching of open web content shouldn’t be allowed without payment. In reality, courts should, and we believe will, find that the great majority of this activity is fair use.
It’s now bedrock internet law principle that some forms of copying content online are transformative, and thus legal fair use. That includes reproducing thumbnail images for image search, or snippets of text to search books.
The U.S. copyright system is meant to balance innovation with creator rights, and courts are still working through how copyright applies to AI training. In most of the AI cases, courts have yet to consider—let alone decide—how fair use applies. A.B. 412 jumps the gun, preempting this process and imposing a vague, overly broad standard that will do more harm than good.
Importantly, those key court cases are all federal. The U.S. Constitution makes it clear that copyright is governed by federal law, and A.B. 412 improperly attempts to impose state-level copyright regulations on an issue still in flux.
A.B. 412 Is A Gift to Big Tech
The irony of A.B. 412 is that it won’t stop AI development—it will simply consolidate it in the hands of the largest corporations. Big tech firms already have the resources to navigate complex legal and regulatory environments, and they can afford to comply (or at least appear to comply) with A.B. 412’s burdensome requirements. Small developers, on the other hand, will either be forced out of the market or driven into partnerships where they lose their independence. The result will be less competition, fewer innovations, and a tech landscape even more dominated by a handful of massive companies.
If lawmakers are able to iron out some of the practical problems with A.B. 412 and pass some version of it, they may be able to force programmers to research—and effectively, pay off—copyright owners before they even write a line of code. If that’s the outcome in California, Big Tech will not despair. They’ll celebrate. Only a few companies own large content libraries or can afford to license enough material to build a deep learning model. The possibilities for startups and small programmers will be so meager, and competition will be so limited, that profits for big incumbent companies will be locked in for a generation.
If you are a California resident and want to speak out about A.B. 412, you can find and contact your legislators through this website.
Originally published to the EFF’s Deeplinks blog.
Filed Under: ab 412, ai, ai training data, california, competition, copyright, fair use
from the the-wrong-approach dept
You shouldn’t need a permission slip to read a webpage—whether you do it with your own eyes, or use software to help. AI is a category of general-purpose tools with myriad beneficial uses. Requiring developers to license the materials needed to create this technology threatens the development of more innovative and inclusive AI models, as well as important uses of AI as a tool for expression and scientific research.
Threats to Socially Valuable Research and Innovation
Requiring researchers to license fair uses of AI training data could make socially valuable research based on machine learning (ML) and even text and data mining (TDM) prohibitively complicated and expensive, if not impossible. Researchers have relied on fair use to conduct TDM research for a decade, leading to important advancements in myriad fields. However, licensing the vast quantity of works that high-quality TDM research requires is frequently cost-prohibitive and practically infeasible.
Fair use protects ML and TDM research for good reason. Without fair use, copyright would hinder important scientific advancements that benefit all of us. Empirical studies back this up: research using TDM methodologies are more common in countries that protect TDM research from copyright control; in countries that don’t, copyright restrictions stymie beneficial research. It’s easy to see why: it would be impossible to identify and negotiate with millions of different copyright owners to analyze, say, text from the internet.
The stakes are high, because ML is critical to helping us interpret the world around us. It’s being used by researchers to understand everything from space nebulae to the proteins in our bodies. When the task requires crunching a huge amount of data, such as the data generated by the world’s telescopes, ML helps rapidly sift through the information to identify features of potential interest to researchers. For example, scientists are using AlphaFold, a deep learning tool, to understand biological processes and develop drugs that target disease-causing malfunctions in those processes. The developers released an open-source version of AlphaFold, making it available to researchers around the world. Other developers have already iterated upon AlphaFold to build transformative new tools.
Threats to Competition
Requiring AI developers to get authorization from rightsholders before training models on copyrighted works would limit competition to companies that have their own trove of training data, or the means to strike a deal with such a company. This would result in all the usual harms of limited competition—higher costs, worse service, and heightened security risks—as well as reducing the variety of expression used to train such tools and the expression allowed to users seeking to express themselves with the aid of AI. As the Federal Trade Commission recently explained, if a handful of companies control AI training data, “they may be able to leverage their control to dampen or distort competition in generative AI markets” and “wield outsized influence over a significant swath of economic activity.”
Legacy gatekeepers have already used copyright to stifle access to information and the creation of new tools for understanding it. Consider, for example, Thomson Reuters v. Ross Intelligence, widely considered to be the first lawsuit over AI training rights ever filed. Ross Intelligence sought to disrupt the legal research duopoly of Westlaw and LexisNexis by offering a new AI-based system. The startup attempted to license the right to train its model on Westlaw’s summaries of public domain judicial opinions and its method for organizing cases. Westlaw refused to grant the license and sued its tiny rival for copyright infringement. Ultimately, the lawsuit forced the startup out of business, eliminating a would-be competitor that might have helped increase access to the law.
Similarly, shortly after Getty Images—a billion-dollar stock images company that owns hundreds of millions of images—filed a copyright lawsuit asking the court to order the “destruction” of Stable Diffusion over purported copyright violations in the training process, Getty introduced its own AI image generator trained on its own library of images.
Requiring developers to license AI training materials benefits tech monopolists as well. For giant tech companies that can afford to pay, pricey licensing deals offer a way to lock in their dominant positions in the generative AI market by creating prohibitive barriers to entry. To develop a “foundation model” that can be used to build generative AI systems like ChatGPT and Stable Diffusion, developers need to “train” the model on billions or even trillions of works, often copied from the open internet without permission from copyright holders. There’s no feasible way to identify all of those rightsholders—let alone execute deals with each of them. Even if these deals were possible, licensing that much content at the prices developers are currently paying would be prohibitively expensive for most would-be competitors.
We should not assume that the same companies who built this world can fix the problems they helped create; if we want AI models that don’t replicate existing social and political biases, we need to make it possible for new players to build them.
Nor is pro-monopoly regulation through copyright likely to provide any meaningful economic support for vulnerable artists and creators. Notwithstanding the highly publicized demands of musicians, authors, actors, and other creative professionals, imposing a licensing requirement is unlikely to protect the jobs or incomes of the underpaid working artists that media and entertainment behemoths have exploited for decades. Because of the imbalance in bargaining power between creators and publishing gatekeepers, trying to help creators by giving them new rights under copyright law is, as EFF Special Advisor Cory Doctorow has written, like trying to help a bullied kid by giving them more lunch money for the bully to take.
Entertainment companies’ historical practices bear out this concern. For example, in the late-2000’s to mid-2010’s, music publishers and recording companies struck multimillion-dollar direct licensing deals with music streaming companies and video sharing platforms. Google reportedly paid more than $400 million to a single music label, and Spotify gave the major record labels a combined 18 percent ownership interest in its now -$100 billion company. Yet music labels and publishers frequently fail to share these payments with artists, and artists rarely benefit from these equity arrangements. There is no reason to believe that the same companies will treat their artists more fairly once they control AI.
Threats to Free Expression
Generative AI tools like text and image generators are powerful engines of expression. Creating content—particularly images and videos—is time intensive. It frequently requires tools and skills that many internet users lack. Generative AI significantly expedites content creation and reduces the need for artistic ability and expensive photographic or video technology. This facilitates the creation of art that simply would not have existed and allows people to express themselves in ways they couldn’t without AI.
Some art forms historically practiced within the African American community—such as hip hop and collage—have a rich tradition of remixing to create new artworks that can be more than the sum of their parts. As professor and digital artist Nettrice Gaskins has explained, generative AI is a valuable tool for creating these kinds of art. Limiting the works that may be used to train AI would limit its utility as an artistic tool, and compound the harm that copyright law has already inflicted on historically Black art forms.
Generative AI has the power to democratize speech and content creation, much like the internet has. Before the internet, a small number of large publishers controlled the channels of speech distribution, controlling which material reached audiences’ ears. The internet changed that by allowing anyone with a laptop and Wi-Fi connection to reach billions of people around the world. Generative AI magnifies those benefits by enabling ordinary internet users to tell stories and express opinions by allowing them to generate text in a matter of seconds and easily create graphics, images, animation, and videos that, just a few years ago, only the most sophisticated studios had the capability to produce. Legacy gatekeepers want to expand copyright so they can reverse this progress. Don’t let them: everyone deserves the right to use technology to express themselves, and AI is no exception.
Threats to Fair Use
In all of these situations, fair use—the ability to use copyrighted material without permission or payment in certain circumstances—often provides the best counter to restrictions imposed by rightsholders. But, as we explained in the first post in this series, fair use is under attack by the copyright creep. Publishers’ recent attempts to impose a new licensing regime for AI training rights—despite lacking any recognized legal right to control AI training—threatens to undermine the public’s fair use rights.
By undermining fair use, the AI copyright creep makes all these other dangers more acute. Fair use is often what researchers and educators rely on to make their academic assessments and to gather data. Fair use allows competitors to build on existing work to offer better alternatives. And fair use lets anyone comment on, or criticize, copyrighted material.
When gatekeepers make the argument against fair use and in favor of expansive copyright—in court, to lawmakers, and to the public—they are looking to cement their own power, and undermine ours.
A Better Way Forward
AI also threatens real harms that demand real solutions.
Many creators and white-collar professionals increasingly believe that generative AI threatens their jobs. Many people also worry that it enables serious forms of abuse, such as AI-generated nonconsensual intimate imagery, including of children. Privacy concerns abound, as does consternation over misinformation and disinformation. And it’s already harming the environment.
Expanding copyright will not mitigate these harms, and we shouldn’t forfeit free speech and innovation to chase snake oil “solutions” that won’t work.
We need solutions that address the roots of these problems, like inadequate protections for labor rights and personal privacy. Targeted, issue-specific policies are far more likely to succeed in resolving the problems society faces. Take competition, for example. Proponents of copyright expansion argue that treating AI development like the fair use that it is would only enrich a handful of tech behemoths. But imposing onerous new copyright licensing requirements to train models would lock in the market advantages enjoyed by Big Tech and Big Media—the only companies that own large content libraries or can afford to license enough material to build a deep learning model—profiting entrenched incumbents at the public’s expense. What neither Big Tech nor Big Media will say is that stronger antitrust rules and enforcement would be a much better solution.
What’s more, looking beyond copyright future-proofs the protections. Stronger environmental protections, comprehensive privacy laws, worker protections, and media literacy will create an ecosystem where we will have defenses against any new technology that might cause harm in those areas, not just generative AI.
Expanding copyright, on the other hand, threatens socially beneficial uses of AI—for example, to conduct scientific research and generate new creative expression—without meaningfully addressing the harms.
Originally posted to the EFF’s Deeplinks blog.
Filed Under: ai, competition, copyright, privacy
from the merge-ALL-the-things! dept
Fri, Feb 7th 2025 05:28am - Karl Bode
For a long while there it was good to be a lumbering U.S. cable monopoly. Companies like Comcast and Charter pretty much enjoyed a monopoly on broadband at “next generation” speeds (over 100 Mbps) in most towns. So while they were losing traditional cable TV customers to streaming (or piracy), they could still extract their pound of flesh courtesy of their monopoly over broadband access.
But that dynamic is starting to change a little bit with the rise of 5G wireless and community broadband alternatives.
While U.S. wireless has generally been more expensive and slower than in Europe, it’s still been good enough to compete with stodgy old cable monopolies. So users tired of their cable company are signing up for cheaper home 5G wireless services, and the big old cable companies are starting to notice.
The remaining three wireless giants (AT&T, Verizon, T-Mobile) added 900,000 fixed 5G customers last quarter, and many of those came from cable giants seeing significant ongoing user defections.
Comcast, for example, lost 139,000 broadband customers last quarter, and 1.58 million TV customers last year. Charter lost 177,000 broadband customers last quarter, and 1.23 million TV customers last year. A lot of those defecting broadband customers moved over to the home 5G wireless service, though community-owned broadband networks also continue to make inroads in a lot of places.
The losses drove down Charter and Comcast stock substantially, driving chatter about a potential merger between the two terrible companies (always the refuge of executives all out of ideas about how to artificially goose quarterly earnings in growth-stagnant markets).
Trumpism generally loves rubber stamping shitty telecom mergers without reading about potential harms to pricing or competition (see: Sprint/T-Mobile), so telecom executives are very excited about the potential for more consolidation in telecom, streaming, and traditional media.
Charter’s CEO addressed rumors of a potential Comcast merger by saying he was “ wide open” to all big merger opportunities, while amusingly pretending that mergers have never been part of Charter’s DNA (Charter merged with Time Warner Cable in 2016 and countless other companies before that):
“I know there’s a lot of chatter out there” about Comcast, [CEO Chris] Winfrey said. But Charter’s strategy, he continued, “has never been dependent on M&A. In fact, it’s really been moving purely from an organic growth perspective, and how do we create value for shareholders from that perspective? You do that by being a great operator. You do that by saving customers lots of money, providing great service.”
Consolidation, whether between direct or indirect competitors in telecom, always ends badly. It always ends with lower quality products, higher prices, and shakier customer service. But it does temporarily goose stock values and generate tax breaks for executives all out of original ideas.
Meanwhile, the broader competitive threat to cable giants is likely being overstated. Charter and Comcast still enjoy broadband monopolies over vast swaths of the U.S. They’ve also been making steady inroads into offering their own mobile wireless service; Charter and Comcast added 529,000 and 307,000 wireless subscribers last quarter alone.
So yes, there’s a slight uptick in competition, but it’s fragile.
Verizon, T-Mobile, and AT&T are artificially lowering their prices for home 5G access to gain market share. Once they’re satisfied (or need to goose earnings due to economic downturns) they’ll start jacking those prices upward. Cable wireless service also leans heavy on the wireless network footprints of incumbent giants, which grab a big cut of the proceeds (and can make those agreements more hostile if needed).
So wireless and cable are “competing,” but they’ll put an end to it should it really start to have any lasting impact on one side or the other.
Keep in mind: there’s also $42.5 billion in infrastructure bill grant money headed to the states. Trumpism is very likely to redirect a big chunk of that money away from popular alternatives (municipal broadband, cooperatives) and toward Big Telecom and Elon Musk. Neither of which, unlike muni-broadband builds, have any particular interest in actually trying to compete on price.
And then, of course, there’s the telecom industry’s multi-decade successful gambit to kill what’s left of federal government and FCC oversight. Thanks to a Trump Supreme Court we’ve effectively dismantled whatever was left of coherent federal broadband consumer protections (whether that’s net neutrality or basic transparency rules), which will likely usher in a new golden age of nickel-and-diming U.S. consumers.
As federal consumer protection falls apart, telecoms will have even less incentive to try and compete on price. Without the pretense of FTC and FCC oversight, they’ll also inevitably fall back into obnoxious new creative ways to nickel and dime existing customers without competitive options.
The only real threat to these companies? The growing number of municipalities and city-owned electrical utilities pushing into fiber access. Recall that Republicans already tried to ban such networks (during a pandemic that highlighted their helpfulness) and I wager a key part of Trumpism will involve helping the telecom lobby interfere with that progress wherever possible in creative and obnoxious new ways.
Filed Under: 5g, broadband, cable, cellular, competition, gigabit, high speed internet, monopolies, wireless