June greetings from Austin, Cedar Rapids, Kansas City, and the Lake of the Ozarks where we are enjoying our nation’s 250th birthday. We hope that each of you has a safe and relaxing Fourth.
This week’s Brief focuses on three interviews that we have enjoyed listening to/ watching over the last month. They are a little longer/deeper and more strategic than tactical. Tim Cook, Dan Schulman, and Demis Hassabis are the subjects, and they have a lot of insights. More on what they have to say below.
Schedule update: We will be at the Midwest Peering Summit on July 8 in Des Moines and look forward to catching up with Brief readers there.
The Fortnight That Was
AI momentum continued this week with the Fab Five erasing all the losses of the last full week of June (+$946 billion for the week, but only +$98 billion for the last two weeks). As we have indicated in previous Briefs, the market is jittery with respect to capital spending. We think they will be reassured when 2Q earnings are released.
Fears of a Starlink takeover of the US telecom industry pushed the Big Three wireless providers lower this week. Collectively, the group lost $38 billion. AT&T is now down 17% in 2026, while T-Mobile is down 11%. Verizon’s YTD gain is down to 4%.
The Starlink/ Charter discussions, per this Bloomberg article, centered around using Charter’s mobile spectrum (CBRS band) assets as well as Charter’s switching infrastructure as a part of a larger platform for a mobile offering. If Charter (and Comcast) were to undertake such an endeavor, they could (theoretically) replace Verizon as the MNO of record for their mobile offerings.
This will not happen overnight and can only happen with Comcast’s cooperation (having half Verizon/ half Charter-powered network is possible, but difficult to manage). Starlink did not really show up for the AWS-3 auction, winning only the Gulf of America and Cincinnati licenses (it’s still puzzling to us why they chose that market to showcase their capabilities). Even if they dominate next year’s upper C-Band auction, they will need a lot of accompanying infrastructure. This is why AT&T and Verizon moved lower but Crown Castle (-3.7% last five trading sessions) and American Tower (-1.6%) barely budged this week. Investors have been burned on the “next great wireless challenger to the Big 3” promise, only to discover that what took three decades to build might not be readily duplicated in three quarters or even three years.
But that was not the only news headline impacting telecom this week. Verizon announced that they would be forming a 50/50 joint venture to address multi-national broadband needs with none other than British Telecom. For those of you who have joined the industry since 2010, MCI (and later AT&T) tried a joint venture with BT previously called Concert which was anything but harmonious (history through Wikipedia is here).
We think that this JV removes a drag on Verizon’s earnings while signaling that global communications network competition has been ceded to Google (34 submarine system investments since 2011) and Meta (20+ investments over the last decade).
Finally, to no one’s surprise, Comcast announced that they will be spinning off NBC Universal (including the theme parks) after nearly two decades of ownership (full announcement here includes a presentation). Initial reaction was very positive, but as the holiday-shortened week ended, the stock was only up 4.8% (the five-day CMCSA chart courtesy of Yahoo! is nearby). We think that this movement signals two things:
- There is separate and distinct value in the cable/ communications business unit for many different buyers/partners (including a merger with Charter)
- Depending on the debt level left with the broadband unit, Comcast could transform itself into a fiber to the home (FTTH) juggernaut
Neither of these events will happen overnight, and the company must finish its network upgrade to DOCSIS 4.0 before undertaking any additional strategic activities. But a nationwide broadband network (leaving out a few states like Iowa and West Virginia) is now possible.
Because of territory overlap, we do not think that AT&T or Verizon would contemplate an acquisition – the regulatory approval process carries too many hurdles. T-Mobile would need to change their “FTTH only” strategy to undertake a Comcast acquisition, but we think there are many synergies (especially if that transaction could include Charter/Cox). However, it would force their German parent to double down on their US investment versus pursuing a diversified strategy.
Our bet is on Charter/ Cox/ Comcast emerging as the national broadband network. It could be transformational for the industry.
We will address June’s macroeconomic developments (there were many) in next week’s interim Brief.
Three Interviews (Holiday Edition)
When we indicated that we would be publishing a “three things you should read/ watch/ listen to” for the Fourth of July Brief, your suggestions were numerous. Here are three (two directly from readers, and one that we think is a better version of the topic suggested by another reader):
- Dan Schulman’s June Bloomberg Talks podcast interview (here – audio only). This is a candid take on his first eight months in the CEO role – dealing with the legacy Verizon culture (we thought Dan’s distinction between the current company and his risk appetites was particularly interesting), the importance of postpaid churn as a critical KPI, and many other topics. If you are in the telecom industry and want to know what Dan is thinking, this is a pretty good summary. Note: this was recorded prior to the release of Verizon’s Simplicity Plan. We discussed that in the last full Brief (here) and The Sunday Brief’s long-time friend Roger Entner’s take on it is here.
- Demis Hassabis’ Stanford Business School interview (here – audio and video). Demis is the co-founder and CEO of Google DeepMind. We featured his Google I/O discussion in the Memorial Day “three interviews” edition, and this one is a bit different – more historical and strategic. Lots of material to unpack – we found the argument that Artificial Intelligence can be a great information equalizer to be especially intriguing given recent commentary about how AI will only increase the wealth and information chasm. It’s about an hour, and worth every minute.
- Charlie Rose’s decade of Tim Cook interviews (here – audio and video). We like this version better than the extended CBS Sunday Morning interview (here) because of its historical perspective (and because, despite his personal shortcomings, Charlie Rose is one of the greatest interviewers in television history). Tim Cook shows through these 90 minutes why he is one of the great leaders in technology history – how he balanced product and operations decisions, why he came to Apple, why he did not use “What would Steve Jobs do?” as his mantra for making decisions, and why the company will continue to flourish. We are not Apple users but think that the company is an American treasure thanks to Steve Jobs and Tim Cook.
As we listened to these interviews over our nation’s 250th birthday, we are reminded of how fast technology has progressed over the last five decades. Think about how many of us will celebrate:
- Viewing current and previous Fourth of July celebrations across the country – streamed and on demand;
- Listening to playlists curated from thousands of patriotic and popular tunes;
- Communicating (likely FaceTime) with friends across the globe (for a fraction of the 1976 cost);
- Posting our activities on Twitter or another social media platform;
- Hopping from one party to another in autonomous vehicles.
We have come a long way and can only wonder what we will be doing on our 300th celebration.
That’s it for this week. Back to 2Q earnings preview in the July 19th Brief. In the meantime, if you have friends who are interested in being notified each time we publish a Brief, please have them sign up at www.sundaybrief.com.
Go Royals and Sporting KC! And GO TEAM USA!
Important disclosure: The opinions expressed in The Sunday Brief are those of Jim Patterson and Patterson Advisory Group, LLC, and do not reflect those of CellSite Solutions, LLC, or Fort Point Capital.
