Apr 26, 2021

Axios Login

Yes, it is Monday already. Sorry.

Today's newsletter is 1,350 words, a 5-minute read.

Situational awareness:

  • Roku said users of its streaming devices and platform may lose access to YouTube TV after a dispute in which, it says, Google pressured it to provide preferential access to user data.
  • Apple announced it will spend $1 billion on a new campus in North Carolina's Research Triangle as part of a five-year, $430 billion investment plan — $80 billion more than Apple announced in 2018.
1 big thing: T-Mobile, once an upstart, joins the giants

Illustration: Sarah Grillo/Axios

T-Mobile has long positioned itself as a disruptive underdog, but a year after the close of its purchase of Sprint, the "un-carrier" has fully joined Verizon and AT&T in the U.S. wireless-provider big league.

Why it matters: Nearly everyone in America has a cell phone, and most people send a significant chunk of change each month to one of the major carriers, making healthy competition in this market a must.

The big picture: During the heated debate over whether regulators should allow T-Mobile to buy Sprint, the key question was whether combining the two weaker players in the cellular business would help or stifle competition.

To get the deal through, T-Mobile had to convince federal and state regulators that the merger wouldn't harm competition.

  • The companies agreed to help set Dish Network up as a new participant in the wireless market.
  • They sold Sprint's Boost Mobile prepaid business to Dish, with T-Mobile providing network services for several years, while Dish builds a 5G network from scratch.

Today, T-Mobile is in a far stronger position than it was pre-merger.

  • It boasts the broadest 5G network and, thanks to Sprint's mid-band spectrum, has an advantage that rivals can't match.
  • With 102 million customers, it has actually passed AT&T to become the second largest wireless carrier.

Yes, but: The transformation leaves T-Mobile with something of an identity crisis.

  • T-Mobile maintains that consumers have gotten the best of both worlds with the company continuing its underdog "Un-carrier" mentality while offering a stronger network with enough scale to finally compete on quality as well as price.
  • Critics, including Dish, argue that T-Mobile is increasingly similar to its rivals, Verizon and AT&T. They also say T-Mobile has started to adopt some of the giants' hardball tactics to foreclose competition.

Dish complained earlier this month in a letter to the FCC that T-Mobile is looking to squelch competition.

  • Dish argues that T-Mobile is rushing to shut down the older Sprint CDMA network by the beginning of next year in order to steal back the Boost Mobile prepaid customers who still rely on that network.
  • It also says that T-Mobile has changed its stance on rules for airwave auctions. Where the company used to support rules that encouraged smaller players, it has begun to back removing such restrictions now that it is one of the Big Three.

Our thought bubble: For now, the wireless business has gone from four players to three. Dish could someday be a true fourth national wireless player, but today it is a bit player, still highly reliant on T-Mobile to support the Boost Mobile customers it acquired.

  • Dish is in the process of building its own 5G network, starting with at least one city this year, but that effort will require sustained investment and take years to even approach being a real competitor.

What to watch: Prices are one of the clearest indicators of the current state of competition.

  • If prices remain where they are, then consumers are probably better off, with networks continuing to improve but costs remaining roughly flat.
  • If the average monthly cell phone bill starts creeping up, that's a sign that consumers are paying a price for cellular provider consolidation.
2. Tipping is taking over the internet

Illustration: Annelise Capossela/Axios

Tip jars, which are ubiquitous in retail stores, are increasingly showing up online as well. Nearly every major social platform has recently introduced some form of tipping, allowing users to directly support their favorite personalities in real time, Axios' Sara Fischer and Hope King report.

The big picture: Creators have been fueling engagement on social media platforms for years, but as the creator economy matures they are gaining more avenues for receiving money directly from their fans.

Driving the news:

  • Twitter is working on adding a "Tip Jar" feature within @TwitterSpaces and on users' main profiles, software engineer Jane Manchun Wong discovered this week. This is in addition to its new "Super Follows" feature, which allows users to charge followers for special content.
  • Clubhouse launched a payments feature at the start of the month to help audio creators generate revenue from the platform. 
  • Facebook said in March it would expand its "Stars" virtual currency, which lets fans reward video and game creators directly for their content.
  • Instagram late last year launched "Badges," a virtual gift that users can buy during livestreams to show their support for the creator in real time.
  • YouTube has been experimenting for years with various tipping features, including "applause" and "Super Chats."

Behind the trend: The popularity and availability of payment platforms such as Venmo, CashApp and Stripe are making it easier for tech companies to enable peer-to-peer payments on their platforms. 

Be smart: Gamers and adult entertainment platforms have led this trend.

  • Twitch and Caffeine have long used tip-like features to drive engagement between gamers and their fans.
  • OnlyFans has exploded in popularity over the past year, in large part because its direct payment features opened an income stream for many of its creators.

What to watch: Following in the social media giants' footsteps, music giants are now also getting in on the trend, which is significant given that musicians have for years struggled to make money directly from fans.

  • SoundCloud is planning to introduce a direct payments between fans and artists through its platform, per Billboard.
  • Spotify in August rolled out a new feature that allows fans to pay musicians directly.
3. Olympics gives esports a try-out

The Olympic movement is dipping its toe into esports, announcing plans for competition in five digital events this year in the run-up to the Tokyo Games.

The big picture: Many traditional sports leagues and teams have been investing in esports in an effort to make sure they don't miss out on what could be a big part of the digital future.

Details: The Olympic Virtual Series, announced late last week, will take place from May 13–June 23 and feature digital competition in baseball, cycling, sailing, rowing and race-car driving, In each case, the events will be tied to a related video game and done in conjunction with the international federation that oversees that particular sport.

Our thought bubble: This is a long-term bet by the Olympics, and maybe even something of a hedge, but it also offers a new international stage for digital sports.

  • There have been other efforts in recent years to tie esports tournaments to the Olympics, but this takes things a step further by linking the competition with traditional sports as well as their respective international sports federations.
4. In memoriam: Dan Kaminsky

Kaminsky in 2008, at a security gathering to discuss the major Internet vulnerability he helped fix. Photo: Glenn Chapman/AFP via Getty Images

The security world was shaken Saturday by news that noted researcher Dan Kaminsky had died at age 42.

Between the lines: Kaminsky was known for his work on the Domain Name System (DNS) and other vulnerabilities, but also celebrated in security circles for his kind heart and good sense of humor.

What they're saying:

  • Startup veteran Rob Rhyne: "Dan Kaminsky once found a flaw in DNS that would have basically destroyed the internet and helped fix it in secret. Doesn't get any more legendary than that. RIP."
  • Luta Security CEO Katie Moussouris: "Dan was always lifting others up, and always pondering deeply about how to solve decades-long pervasive and complex problems."

My thought bubble: I met Dan two decades ago when reporting on Blue Hat, then a little-known internal Microsoft security conference.

  • I'll always be grateful to Kaminsky and others who took me under their wing when I got to attend back in 2007.

The bottom line: I leave you with a few words from Dan himself, via a January 2020 tweet:

"At the end of the day, I’m old, and tired, tapping thoughts into a faith-based keyboard, hoping I can do a thing or two for the next nerd full of silly magical ideas. Hoping you will too."
— Dan Kaminsky
5. Take note

On Tap

  • It's a busy week of earnings reports, with Google, Microsoft, Pinterest and AMD due to report on Tuesday, and Apple, Facebook, Spotify, Qualcomm and eBay among those delivering reports on Wednesday.
  • Apple is expected to make iOS 14.5 available, making mandatory its new consent rules around online tracking and adding new features, including the ability for those with an iPhone and Apple Watch to bypass face recognition for unlocking their phone. That's become a big deal in the era of widespread mask-wearing.

Trading Places

  • Ajit Pai, former chairman of the Federal Communications Commission, has joined private equity firm Searchlight Capital Partners as a partner, Axios' Dan Primack reports.
  • Tony Aquila is taking over as CEO of electric vehicle maker Canoo, with co-founder and former CEO Ulrich Kranz stepping down, per The Verge.

ICYMI

  • India's government ordered Facebook and Twitter to take down posts critical of the government's handling of the latest COVID-19 outbreak, which the companies have done. (NYT)
6. After you Login
Screenshot: Axios via Happynetbox.com

Check out Happy Net Box, an experimental mini-social network created by Ben Brown using one of the oldest components of the internet — the finger protocol accessible from the command-line interface on most computers.