Fri Dec 21 2018
Top Ten Irreverent
Predictions for 2019 (Part One)
1) TMobile CEO John Legere
opts for a shorter hair style and
develops an aversion
to pink.
At age 60, Mr.
Legere never convinced me with his “maverick”
hair and clothing style.
In 2019, he will cut his hair and
ditch the biker garb, because a combined TMobile-Sprint venture will not be the
disruptive competitor that TMobile truly was when it had no alternative. The merger enhances the ability of U.S.
wireless companies to charge some of the highest rates in the world.
Expect
even higher rates, bolstered profits and lots of “free” and “unlimited”
services that are neither.
2) 4-1 is less than 4.
A reality check
folks: does anyone honestly think reducing the number of major U.S. wireless competitors
to three will benefit consumers? Competitive
necessity and the burden of devoting sleepless afternoon innovating declines
when it becomes easier to match prices set by AT&T and Verizon. A combined Sprint-TMobile means fewer 5G
towers and less pencil sharpening.
Unfake
news flash: four viable competitors are better than three. The combined company has no greater incentives
to make capital expenditures and no greater access to capital than the efforts
of two separate companies.
3) It will get even more
difficult to talk to a human
“customer service” representative.
Recently, a series
of remarkably bad corporate screw ups have sucked massive amounts of time and spirit from yours truly. Vanguard Investments mishandled a major roll
over of a retirement account and compounded the error by having a customer
service procedure designed to prevent access to someone with authority to
correct mistakes.
There’s
a right way, a wrong way and the fill in the blank company way. Vanguard cannot convert the registration of a
retirement account while maintaining the identical number of shares. To add insult to injury, the company generated
a scripted letter that blames
unspecified government regulations requiring a two-step over process
that imposed a sizeable financial risk when account one gets cashed out and
account two cannot get funded for days.
At
least in the Vanguard screwup, I got to talk to a human. Experian, one of the three major credit
reporting companies, makes it just about IMPOSSIBLE to talk to, or correspond
with, a human.
At
the tender age of 63, I would think that Experian could have reached the
conclusion that I am credit worthy. I have
a multi-decade record of timely bill payments, have hefty lines of credit, handled
six figure mortgages and have an excellent current credit score.
Imagine
my surprise and embarrassment when, at point of purchase with other purchasers
in line behind me, I was denied opportunity to apply for a BestBuy credit card
and receive a 10% discount for my first purchase. The reason: Experian’s
incomplete report convinced a Citibank algorithm that I lacked “sufficient
credit experience.”
I
think insufficient credit experience means I do not pay 24% interest rates on
credit card debts and lack other kinds of debt, such as a mortgage. In other words, I do not deserve a high end
credit card, because Experian does not have enough evidence that I can manage
debt, or perhaps the algorithm projected insufficient fee and interest revenues. Apparently, being debt-free is bad, but of
course Citibank would allow me to get an inferior card if I agreed to pay it a
$59 annual fee.
Does
this make sense to you? Might human
intervention and common sense have remedied these problems? Ask the algorithm.
4) If you can “handle the
truth,” listen to buy side Wall Street
telecom analysts.
Being an academic,
telecommunications policy researcher and writer, I consider it a worthwhile duty
to seek out all points of view and even alternative facts/statistics. I am inundated with obviously bogus assertions
how a specific regulation helps or hurts Americans. This Blog attempts to refute unbelievable assertions
such as the canard that network neutrality regulation singularly caused U.S.
companies to invest billions less in infrastructure.
Listen to financial
analysts, if want to know the truth about the current state of play in 5th
generation wireless, the health of the broadband ecosystem and true marketplace
conditions. In a recent teleconference,
an analyst advising what stocks to buy in the Internet/telecom sector, made
several matter of fact statements that clearly dispute what Chairman Ajit Pai
and others want us to believe:
1) Network neutrality, or the lack of it, has limited—if any--
impact on carrier capital expenditures. Capex
ebbs and flows with the need to invest in next generation plant and that
necessity trumps regulatory uncertainty, the potential for future disruptive
litigation and whether carriers have duties to make their networks accessible,
or not.
2) The likely approval of the TMobile-Sprint merger will help
carriers raise prices and increase Average Revenue Per User, no if, ands, or
buts about it.
5) In these uncertain
times, don’t expect “unlimited” to have
a simple, singular meaning.
Sadly,
no court or regulatory agency (included the much touted reliance on the Federal
Trade Commission) will insist that unlimited has a singular and commonly
understood meaning. Once upon a time it
did: unlimited meant without limits, and no caps on usage, or throttling of bit
transmission speeds. We live in a more sophisticated and complicated world now
where unlimited has a new meaning: conditional and qualified use of a service.
I
readily admit that the court of public opinion likes to think that some service
is unlimited and free. There’s a
suspension of disbelief and common sense when unlimited actually means that caps on usage will result in service so slow that it cannot provide reliable
carriage of data.