Data Sheet—Why It’s Tough to Bet Against T-Mobile CEO John Legere

Investors yesterday prematurely threw in the towel on the T-Mobile merger with Sprint, driving both stocks down on the assumption that antitrust regulators will block the deal. Contributing to investor pessimism was the fact that the merger deal didn’t include a break up fee…suggesting the companies themselves have no great confidence in their ability to win approval in Washington. Some were also dismayed by the companies’ financial forecast for this year, distributed Sunday as part of the merger announcement.

But T-Mobile CEO John Legere clearly isn’t giving up. Sure, moving from four telecom carriers to three seems to presents a classic antitrust problem, with research showing consumers usually lose in such cases. But Legere is arguing two things make this different:

First, the battle for 5G. My colleague Aaron Pressman, who has done hands down the best coverage on this topic, has written here about how the Trump administration’s obsession with China is driving Legere’s latest urge to merge. Expect him to be in Washington arguing that AT&T and Verizon have taken their eyes off the prize, with acquisitions in media, and only a combined T-Mobile and Sprint can assure that a dangerous “5G” gap doesn’t open up between China and the U.S.

Then, second, there is Legere himself. He is the “uncarrier,” champion of the consumer, and will never become a cozy oligopolistic, he insists. Giving him more market clout will increase competition and help consumers, regardless of what the models say.

I especially like the second argument. Legere has recast the role of CEO, becoming a one-man disruption band, almost Trump-like in his use of Twitter to attack his opponents. It’s worth re-reading Pressman’s February piece on him to take the measure of the man. I don’t know if passion, drive, and sheer brashness can win an antitrust battle. But if it ever can, this will be the one.

In any case, this will be fun to watch. Given his record of success, I’m inclined to give Legere better odds than the market is.

News below.

NEWSWORTHY

Gone, baby, gone. Jan Koum, co-founder of the WhatsApp messaging service that he sold to Facebook for $22 billion in 2014, is stepping down as CEO and leaving the company after reportedly clashing over privacy and encryption policies. Koum may be forfeiting stock grants worth almost $1 billion, Bloomberg reported, but he already cashed in grants worth several billion over the past three plus years. Koum's departure follows the quieter exit of WhatsApp's other co-founder, Brian Acton, who not only quit Facebook but also tweeted the #DeleteFacebook hashtag.

Witness for the prosecution. A California Supreme Court ruling on Monday will make it easier for workers in the gig economy, like Uber drivers or TaskRabbit gofers, to claim they are employees as opposed to independent contractors. The court's three-part test puts the burden of proof on employers and includes the requirement that a worker's role is “outside the usual course of the hiring entity’s business.” Meanwhile, an investigation by CNN focused on the dark side of ride hailing drivers, finding 103 U.S. Uber drivers accused of sexual assault or abuse in the past four years and and 18 drivers for Lyft.

State of play. Twitter announced 30 new or renewed agreements on Monday for video content, including with ESPN, Viacom, and Major League Soccer. Variety had a detailed run down of all of the deals, but suffice it to say that investors were pleased. Twitter shares gained 5%.

Reindeer games. Fitbit and Google announced a kind of blah blah deal on Monday about health care data APIs and HIPAA compliance. But buried in the press release was a hint that the two may work together on a future wearable device. That would make a lot of sense, given that Google's Android ecosystem has lots of apps, which Fitbit's smartwatches lack, while Fitbit has some nifty hardware designs, which Google lacks.

The company men. Volkswagen and Chinese ride-hailing company Didi Chuxing have struck a more substantive deal, agreeing to work together on self-driving cars. "We want to explore mobility projects as well as autonomous driving and robo-taxis,” Weiming Soh, board member in charge of strategy at Volkswagen Group China, told the Wall Street Journal.

Dogma. One of the most reliable sources of leaks about Apple's future product plans, KGI Securities analyst Ming-Chi Kuo, has stepped down and won't be tracking the iPhone maker anymore, according to a report in the China Times. Kuo was among the first to report on the demise of the headphone jack on iPhones, the OLED screen of the iPhone X and the Apple Pencil stylus. And, oh yeah, Apple reports quarterly earnings after the market closes.

Sum of all fears. Put SEC Commissioner Robert Jackson down for a "no" at the bitcoin hype party. In an interview on CNBC, Jackson on Monday said digital currencies were “full of troubling developments." He's no fan of initial coin offerings, in particular. “Investors are having a hard time telling the difference between investments and fraud,” he said.

(Headline quote reference explainer of the day.)

FOOD FOR THOUGHT

The Internet makes it easier than ever to distribute text and video, which can be a big help for human rights activists trying to get the word out about horrific conditions in war zones or repressive regimes. But the Internet is also a fickle mistress when it comes to preserving the evidence for the future. Researcher Evan Hill makes the case in BuzzFeed that as photo hosting sites go out of business, link shortening services disappear and tweets or YouTube videos get deleted, the historical record is destroyed. Hill also profiles two nonprofit efforts to preserve online posts. One is an online archive, called simply 858, about Egypt’s 2011 popular uprising.

There is no artifice to 858, no tech-utopian snake oil about solving the problem through the blockchain or making a scalable solution for all of humanity. Its interface brings to mind the functionality of an early 2000s PC video player, and it can break down, like when the sound cuts out as you move from one clip to the next. There are also awkward gaps in the history it archives, such as the dearth of footage documenting one of the largest massacres of civilian protesters in modern world history — the infamous assault on a Muslim Brotherhood–led sit-in shortly after the military coup of 2013, which killed more than 800 civilians. Mosireen, mostly composed of leftists and liberals who despise the Islamists they blame for derailing the revolution, did not film the Brotherhood protests, and seem to have shown little interest in working with the people who did.

But 858 is a real achievement, succeeding in what the internet’s original evangelists had always hoped would be its great prize: the democratization of information. It takes a contested historical moment and places the documentation in the people’s hands without an unreliable corporate intermediary. You are reminded, as you sit through video after video, not only that something revolutionary really did occur in Egypt in 2011 but that the event was truly popular, drilling through nearly every layer of society.

IN CASE YOU MISSED IT

4 Interesting New Features From Microsoft's Latest Windows 10 Update By Jonathan Vanian

France Seized the Domain France.com from Its Long-Time Owner. Now He's Suing By Hallie Detrick

Iran Bans Telegram, an App Used By Half the Country By David Meyer

Workplace Employee Brainwave Monitoring Is Already a Real Thing By Hallie Detrick

What the T-Mobile and Sprint Deal Means for Customers By Aaron Pressman

Apple Might Stop Including a Headphone Adapter With This Year's iPhones By Don Reisinger

Facebook Has Been Hit By Dozens of Data Lawsuits. And This Could Be Just the Beginning By Jeff John Roberts

BEFORE YOU GO

The theory of gravity as developed by Isaac Newton and refined by Albert Einstein doesn't quite explain the movement of stars, necessitating the addition of unproven "dark matter" to make the equations balance. Quanta Magazine delves into some of the alternative theories of gravity that try to explain the universe without the need for dark matter. Most have been shot down. “99.9% of the time you rule out the hypothesis," quips Enrico Barausse, a staff researcher at the Astrophysics Institute of Paris. "The remaining 0.1% of the time you win the Nobel Prize.”