Wall Street Ponders Verizon, Comcast Merger Under Trump With President-elect Donald Trump's telecom advisors publicly stating they plan to kill net neutrality and the FCC, most analysts believe (in sharp contrast to campaign rhetoric) that Donald Trump's administration will likely be considerably friendlier to incumbent ISPs -- and their proposed mergers -- than perhaps any previous aministration in the history of the broadband era. As a result, many ISPs and Wall Street analysts are positively giddy at the possibility of mergers that may have previously been unthinkable.

Most of these conversations are the usual fare -- most commonly a Comcast or Charter acquisition of Sprint or T-Mobile, or a merger between Sprint and T-Mobile (which was blocked under the outgoing FCC). But UBS analyst John Hodulik apparently has grander visions, and believes it's within the realm of possibility that Comcast could merge with...Verizon. In a research note to investors, Hodulik this week proclaimed that we're at the front end of a massive new wave of consolidation that will likely involve both the cable and wireless sectors. "Densification of wireless networks required to meet the needs of video-centric subscribers increases synergies of cable-wireless combinations and provides the springboard for 5G-based services," he proclaims. "A roll-back of Title II re-classification could further increase incentives for cable," he adds, casually citing the likely dismantling of net neutrality and the FCC under Trump. He put forth a number of models that include Dish fusing with T-Mobile or other variations. But he noted that a Comcast or Charter merger with Verizon would create "significant synergies" and "integrated products" while being "accretive to revenue and EBITDA growth." Such a merger would certainly be good for broadband providers, as it would eliminate one or several fixed and wireless competitors from the market in one fell swoop. But such a move would spell trouble for consumers, the welfare of whom are usually only fleeting afterthoughts in such analysis for what should be obvious reasons. For example, the elimination of Verizon would result in significantly less competition for Comcast in the Northeast United States. Currently, the Northeast is becoming one of the last places in the country Comcast hasn't deployed usage caps, thanks in large part to Verizon's FiOS domination of the coast. The end result of most of Hodulik's scenarios would be higher rates and worse service for most consumers as Comcast gained a total monopoly in many east coast markets. Then again, Trump telecom advisor and former Sprint lobbyist Mark Jamison doesn't believe telecom monopolies are real. That said, as the acquisition of AOL and Yahoo make clear, Verizon clearly wants to become a media powerhouse. Its wireless ambitions (and the location and other data it hoovers up) are a cornerstone of these goals. As such it seems much more likely that Verizon would be willing to only part with its fixed-line networks, while retaining its wireless infrastructure. But with the kind of year 2016 has been, it should be pretty clear that absolutely anything could be in store for us in 2017. That said, as the acquisition of AOL and Yahoo make clear, Verizon clearly wants to become a media powerhouse. Its wireless ambitions (and the location and other data it hoovers up) are a cornerstone of these goals. As such it seems much more likely that Verizon would be willing to only part with its fixed-line networks, while retaining its wireless infrastructure. But with the kind of year 2016 has been, it should be pretty clear that absolutely anything could be in store for us in 2017.







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Most recommended from 89 comments



Zenit

The system is the solution

Premium Member

join:2012-05-07

Purcellville, VA 19 recommendations Zenit Premium Member Comizon? Vericast? Craptastic! IMO that analyst is on some pretty good drugs thinking Comizon is possible. I can't see Brian Roberts giving up control to Lowell McAdam. Comcast is his empire and he will not share it. There would be so much resistance to this move from local and state governments that the merger (if it were to happen) would end up triggering real riots. Internet is like water these days for people.



Comcast's investors will not want Verizon's debt either.



The only "good" potential outcome of this worst-case nightmare scenario would be the high probability of splitting VZ ILEC from VZ into a separate independent entity. Which is honestly something I have wanted to happen for a long time, VZW is strangling VZ ILEC to death. VZ ILEC nearly always is in the green on the balance sheet quarter to quarter and can fund well-paced upgrades on its own. VZ management is holding back FiOS expansion and has pretty much banned DSL improvements for the most part. Other than that, this scenario is a literal disaster.



Even the most conservative FTC or DOJ would not allow such a merger without some type of asset sale. Recall that the Bell System was busted under Reagan. He could have had the DOJ drop the United States v. AT&T case in his first year in office, instead they moved forward, eventually getting AT&T to capitulate with the compromise that lead to the formation of the RBOC's.



Out of all of the UBS merger theories, Sprint + TMo, VZ + Dish, T-Mo + Dish, or Comcast + T-Mo or Sprint are more within the realm of reality.



Also, does anyone remember back when Wheeler was first selected? Everyone thought he was going to be the worst guy ever in the FCC due to his lobbyist background, total MSO shill. Didn't turn out that way. Not saying we will be as lucky this time, but stranger things have happened.



I highly doubt that Trump will let Comcast gobble up more media assets after getting a huge grudge on NBC. They were totally in the tank for the Democrats this time around so he owes Roberts 0 extra favors.



Also, recall that the telecom act of 1996, which set the groundwork for these telecom and media mega mergers, was signed by a Democrat president. Crappy telecom choices are a bipartisan tradition for the most part. b10010011

Whats a Posting tag?

join:2004-09-07

Bellingham, WA 16 recommendations b10010011 Member You knew it was a snake when you picked it up, you don't get to be supprised



That's a special kind of stupid. You elected a billionaire that is appointing other billionaires to "fix" the system that made them billionares?That's a special kind of stupid. jmmilner2

join:2011-05-17

Yorkville, IL 240.8 11.7

·Comcast Business

ARRIS SB6183

15 recommendations jmmilner2 Member Mega mergers More power concentrated in the hands of fewer, larger corporations. Great for CEOs, good for stockholders, not so great for employees and customers. Way back when I took economics in college, the definition of an ideal free market assumed an infinite number of competitors, no one of whom was large enough to dominate the space they competed in. Similar conditions applied to employees and customers,so that none of the players on either the supply or demand side could move the market individually. Under these conditions the free market was supposed to drive prices towards costs, producing an efficient distribution of the goods and/or services involved.



Today's free market seems more like what I was taught was a monopoly, duopoly, or oligopoly; depending on how cross-elastic various modes of data communication are in various geographic areas. Terms like corporatocracy come to mind.

Packeteers

Premium Member

join:2005-06-18

Forest Hills, NY 11 recommendations Packeteers Premium Member we need a 2 out of 3 rule wired

wireless

content



no merger should be allowed that includes all three. shmerl

join:2013-10-21 11 recommendations shmerl Member That should be forbidden A clear anti-trust violation, Trump or no Trump.

telcodad

MVM

join:2011-09-16

Lincroft, NJ 9 recommendations telcodad MVM The possible M&As

Possible Telecom Mergers and Acquistions

From the report, here's some of the M&As that UBS thinks could be possible. From the report, here's some of the M&As that UBS thinks could be possible.

baineschile

2600 ways to live

Premium Member

join:2008-05-10

Sterling Heights, MI 8 recommendations baineschile Premium Member Stock Comcast stock just hit $70 today, for the first time ever. Someone knows something

PapaMidnight

join:2009-01-13

Baltimore, MD 5 recommendations PapaMidnight Member Oh my gosh... quote: But UBS analyst John Hodulik apparently has grander visions, and believes it's within the realm of possibility that Comcast could merge with...Verizon.

tmc8080

join:2004-04-24

Brooklyn, NY 2 recommendations tmc8080 Member If you think prices are a ripoff now! Hold onto your wallet!

Never mind the BILLION dollars + it will be for security which are funded by the taxpayers over 4 years. Should it ever happen this would mean higher prices and less service by a combined company and the death of union jobs on day one. For that reason alone the idea will die in fantasy land.