I don’t know why anyone would want to buy AT&T (NYSE:T) stock.

The moves into content by former CEO Randall Stephenson bombed spectacularly. Shareholders are left with $177 billion in debt and, starting next year, a skinnier dividend. The company’s wireless prospects are decent, but only because it can rip off customers.

I called AT&T a yield trap a year ago, as it turned out to be. Before the dividend cut, I was optimistic about its 5G spectrum. I called it a “sell” after the cut.

The dividend cut is not yet reflected in the stock price because the cut has not happened yet. Shares are down just 7% from where they were a year ago.

Waiting for the Punch

The cut was slipped into the announcement of the deal to merge WarnerMedia with Discovery (NASDAQ:DISCA). It promised a dividend of 40% to 43% of anticipated free cash flow of $20 billion. That works out to $8 billion. In 2020, AT&T paid out $20 billion in dividends. The cut came shortly after CEO John Stankey publicly defended the dividend.

I suspect there are still many shareholders unaware that their payouts are about to drop. Management continues to spin the cut as an improvement. They argue that since they’ll also get a stake in Warner Discovery, they should be joyful.

As our Will Ashworth wrote in July, it’s still unclear how badly shareholders are being hosed. This is a bigger crime than the hosing. AT&T will get a majority stake in the new company, and some debt is going over to it, but not enough to compensate.

Better Ways to 5G

AT&T knows it’s in deep trouble because delivering 5G service is expensive.

It proposed spectrum “guardrails” against competitors to the FCC, explained in a mealy mouthed blog post about 5G issued Sept. 1.

These are limits on the control over mid-band spectrum rivals Verizon (NYSE:VZ) and T-Mobile (NASDAQ:TMUS) might exercise.

The proposal is AT&T literally screaming that it’s not competitive. It’s AT&T admitting that it was so wrapped up in its drama over Time Warner (and DirecTV) that it lost the plot on its business.

While AT&T was busy trying to undo Stephenson’s mistakes, of course, T-Mobile was able to buy Sprint. This gave it prime spectrum real estate in the 5G bands. It created cost savings that will flow for some time. It also created a debt-laden balance sheet, $99 billion at the end of June. Still, T-Mobile stock is up over the last year, by 17%.

Verizon is in a similar position as T stock, but at least it has been buying wireless assets. Verizon’s debt in June came to $167 billion, but equity was $227 billion. That’s an enterprise value for Verizon of about $390 billion, against about $370 billion for AT&T and about $270 billion for T-Mobile. That’s a good indication of where the three companies stand as the 5G race begins in earnest.

The Bottom Line for T Stock

The big danger in all this isn’t to AT&T or T stock. The big danger is to American competitiveness.

By selling the nation’s spectrum in huge chunks to private parties, the debt of AT&T, Verizon and T-Mobile is the market’s debt. It must be paid back, in the form of higher service fees.

Americans already pay more for Internet bits than people in other countries. This is especially true in wireless, where American businesses pay more and get less than competitors.

This is the economic price of deregulation and treating spectrum as a market good, rather than a common good. It’s a scandal that is going to hit AT&T, and its competitors, before the debts are fully paid. It’s why I wouldn’t touch T stock of any of its competitors with a barge pole.

On the date of publication, Dana Blankenhorn held no positions in companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Living With Moore’s Law: Past, Present and Future available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.