Hey everybody, David and David here from payetteforward.com and upphone.com, and in this video, we're
going to explain why it DISH mobile will fail. If you've missed the story, T-Mobile and Sprint
are pretty close to completing their merger, which would make DISH the fourth major Wireless
carrier in the country, and we just don't see how it's going to work out. And we're
not alone in this. Recently, a group of economists some from NYU, Georgetown, the University
of Utah, and Northeastern University got together and they wrote a paper about why this is going
to fail. So really, when it comes down to is that they're trying to justify this merger
based on the fact that it's going to increase competition and be good for consumers, when
in fact, it's obviously not. Right. So there are a number of problems with this. DISH mobile
doesn't exist. Right, first off. So we're kind of creating this merger, and then we're
saying that it's going to work based on an idea. And this idea is that DISH mobile is
going to build out a competitor — a nationwide competitor to Sprint and the new T-Mobile,
they're calling it, to AT&T and Verizon within the next seven years. I don't see it happening.
Yeah, they say that they're going to be able to do this with a 10 billion dollar investment,
which is not going to be enough. And if they fail, which DISH has done in the past with
other promises that they've made that have been similar, they have to pay a fine of 2.2
billion dollars in 2023. The target that they're supposed to reach is 70% of American citizens,
not 70% of America — but 70% of the population. So if they reach 50% by 2023, they have to
pay 580-something million dollars, which is tax deductible to them, and then they have
two more years to finish building out this network. But people think that it's highly
unlikely that DISH will ever build out the network, because compared to the Spectrum
that DISH has... So the way this works is that wireless carriers bid on certain spectrums,
like 800 megahertz is DISH's spectrum. T-Mobile commercials; they're talking about 600 megahertz.
So DISH owns the spectrum and in seven years — in less than that... That spectrum is
worth way more than 2.2 billion dollars. Amazon; Google; somebody's going to come in and just
buy them out. Yep, and then take over. So the whole thing is based on a bunch of promises
and a bunch of hope and guessing. Why don't we talk a little bit more about specifically
what the plans are? But also something to keep in mind is that T-Mobile can start capping
DISH mobile after three years. So they can impose these data caps. The fundamental flaw
with this thing — another one — is that T-Mobile is supposed to support DISH mobile
for the next seven years, but DISH mobile is their primary competitor. It doesn't make
sense that T-Mobile is incentivized. So the DOJ comes in and they they invent all these
rules for T-Mobile that they have to follow. Right. Well, they have one person who is going
to oversee those rules and make sure T-Mobile sticks into them. But there are all these
little; I mean, these people are smart. There are going to be loopholes in this contract.
There going to be other ways. Yeah, DISH gets harmed and there are other consequences that
people aren't thinking about. So there are the major Wireless carriers, which as you
know are Sprint, AT&T, Verizon, & T-Mobile, and they're major carriers because they have
actual physical infrastructure. And you need to have physical infrastructure to be able
to compete. Every other carrier in the U.S. is an MVNO, which is a mobile virtual network
operator. Boost Mobile. Yeah, Cricket Wireless. You name it. It's a subset of one of the four
major carriers. So DISH mobile is going to operate as an MVNO right off the bat of Sprint
and T-Mobile the new T-Mobile. This isn't going to be good for other MVNOs or for other
carriers. And here's why: Right now, AT&T and Verizon have very strong customer bases.
So they're not incentivized to sell off their services to the smaller carriers at good prices.
Right. But Sprint and T-Mobile are both smaller, so they are incentivized to sell off their
services to Boost Mobile or Cricket for lower prices, which keeps those prices down on the
MVNO front for the smaller carriers. If you eliminate that competition between Sprint
and T-Mobile for the wholesale prices of MVNOs — of that of their service, then all the
MVNO prices will go up. And so our lower cost carriers are going to start to disappear because
there isn't competition. Verizon and AT&T do not need to wholesale off their services
because they have enough customers. Right. Sprint and T-Mobile are the only competition.
So if you look at it, you know, okay, there are a big four; but really there's only two
— right — now that are competing to keep the low-cost carriers low cost. This is one
of the points they made in the Net Institute paper. I think it's a good one. Yeah, I'll
link to that in the description — description section below. We took a look at that paper
and really pokes a bunch of holes in this plan that just kind of seems short-sighted.
Yeah. I just don't see how a DISH mobile is going to be able to build a nationwide infrastructure
with an initial budget of 10 billion dollars in such a short time frame. No, and I don't
even think they're going... I don't think they're going to. I don't even think they're
gonna try — not even gonna try, just sell it off after the contract expires. Yeah, take
the penalty and write it off on your taxes. Then sell it to Jeff Bezos for a jillion dollars.
You're having to help me just make any sense of this. The final paragraph of this document
that the economists wrote: "This proposed settlement would permit a four-to-three merger
based on a remedy that accepts competitive harms..." — meaning it does make sense
that T-Mobile would have to help its number-one competitor. That doesn't make any sense "...competitive
harms in the short and medium term, even based on an exceedingly optimistic view of possible
benefits in the longer term. This does not represent good policy. Rather, it suggests
a determined effort to invent a basis for approval of a merger that is anti-competitive
on its face. Indeed, if the substantial acknowledged competitive problems with this four-to-three
merger are remedied by the strategy of rearranging some assets, negotiating some contracts, and
then hoping for the best some years down the road, it is unclear what merger would not
be salvageable with the same scheme." So this is more than just wireless. This is setting
a precedent legally where we're able to justify eliminating competition and saying, "Okay.
This doesn't violate antitrust laws based on hope." Based On A Wish. Yeah, so maybe
it should be called WISH Network, and not DISH Network where you go because it doesn't
exist. Right. And they're just looking over the — I mean, what's going to happen to
all these other MVNOs? If I was Cricket and I was you know, I'd be like what the heck
is going on? How come they get to be one of the major four carriers when they literally
have nothing more than I do as Boost Mobile? Boost Mobile has more because they have a
customer base of customers - yeah, they have absolutely nothing more there. I just don't
understand. Yeah, it's crazy, and we don't think it's going to work. There's still one
big legal hurdle for this to be overcome in California. If the merger gets struck down
there, they're going to appeal to the federal court. And the way the federal court is comprised
right now, they will probably approve the merger. So there's money changing hands here.
I mean, it's... I don't understand why they're approving this. It's based on hope. Yeah.
I'm with you. It's like it's supposed to be competitive, isn't it? Doesn't exist. It's
increasing competition by decreasing the number of competitors... makes sense. Yeah, it's
clearly not. I mean, if there was another competitor that could you know, if only there
was a fourth carrier right now with, you know, 60 million subscribers, and its own infrastructure
Network? Yeah, like Sprint and T-Mobile! Why don't we just like, I don't know, invest in
them to keep the competition? Especially... and people are just overlooking the fact that
it's good to have two lower quality carriers to compete with each other. That's a good
thing! That it's okay because they sell their products to different subsets of organizations.
It's not just about the customers. It's about the wholesale stuff. It's about the Boost
and the Cricket, so like, yes. Sprint might have fewer people, but if you start to add
up the effect that they have on the market as a whole, it's that good. Yep. Anything
else you want to add here? No, I said... Yeah, we don't think DISH Mobile's going to work.
It's almost certainly going to fail and get bought out. Is that, yeah, that's kind of
my take — that's gonna fail. Yeah. It's not gonna be good. We'll see where our cell
phone service bills are right now. Yeah, and then in seven years. Yes, Dish mobile. So
they're going to create... they're not going to increase cell phone bills for three years.
After that, all bets are off. So it's like... it's ridiculous. It's yeah... I'd like to
build on a wireless network in seven years that's going to cover 70 percent of the U.S.
population. Do it! It doesn't make any sense, as you have as good a shot as DISH right now.
Yeah. Thanks for watching. Yeah, thanks for watching this video. Give it a thumbs up.
If you enjoyed, leave us a comment down below. Let us know what your thoughts are on the
new DISH Mobile. TBD — we'll see how it goes. Wish Mobile! And don't forget to subscribe
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