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The T-Mobile Acquisition of Layer3 TV, Net Neutrality—and TV at Large

July 17th, 2018   ||    by Callie Wheeler   ||    No Comments

Another week, another company adds television to its interests. The recent announcement of T-Mobile’s acquisition of Layer3 TV is the “un-carrier’s” big move into the industry, and it aims to launch its own offering sometime next year.

As businesses increasingly invest in over-the-top (OTT) platforms—including Silicon Valley giants like Apple and Facebook—the future can seem like a somewhat bleak one for broadcast and cable television. But the recent gutting of net neutrality protections may change that.

The “Un-carrier” Is Going to “Un-cable” Your TV

As TechCrunch reported, T-Mobile already offers unlimited streaming for some paid TV providers through its “Binge On” program, meaning this foray into paid television pairs well with its current services.

The announcement came with a video on T-Mobile’s YouTube channel, in which CEO John Legere explains how the mobile carrier plans to disrupt the cable industry with a new offering. Legere specifically points to the cable industry’s inability to keep up with changes—the shift to mobile viewing, for example.

Meanwhile, Net Neutrality Was Gutted

The Federal Communications Commission (FCC) repealed net neutrality rules just a day after the T-Mobile acquisition was announced. While the two may seem unrelated, this reversal could have huge implications for OTT providers. Paid TV services like Netflix and Hulu—as well as the offering T-Mobile is planning to create—depend on customers’ ability to access quality internet for streaming.

The New York Times reports that whereas internet service providers (ISPs) were prohibited for charging users for certain content or blocking specific sites, the repeal means ISPs could charge Netflix users more money to stream than to browse Facebook, for instance.

Understandably, paid television providers were not happy with the ruling. Netflix tweeted it would oppose the repeal and promised this was the beginning of a long legal battle. So, what does this mean for T-Mobile and other companies investing in OTT streaming services?

No Clear Winner—Yet

While there are frequent false alarms about the possibility that broadcast and cable are dead, there’s no winner—or loser—as of now. The FCC ruling may open the doors to internet costs that push viewers back into the arms of cable companies. Streaming is typically done on mobile devices, but many cord-cutters still sit down to watch television the traditional way: on a TV at home. At the very least, the ruling may be enough to cause anyone considering cord-cutting to wait and see what happens.

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