A trend toward fewer, larger companies
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Would consumers ultimately benefit from an AT&T merger with Time Warner? Or would negatives outweigh positives?
That’s the question that the courts are getting ready to consider. It has been almost a year and a half since AT&T first announced plans to merge with Time Warner – a vertical integration, which involves merging companies whose operations include both communications infrastructure and content and services. Wireless communications, plus home entertainment services, plus content providers like HBO, CNN and TNT.
As the case comes before U.S. District Senior Judge Richard Leon of the District of Columbia, the same judge who cleared the way for the Comcast NBC Universal merger eight years ago, there are predictable arguments being made by stakeholders on both sides. AT&T wants the merger to have the might to compete with the new powers of media – Netflix, Amazon, and even Apple. The Justice Department hopes to block the merger, saying that it would ultimately hurt competition partly through consolidation and partly through the dangers of vertical integration where carriers and transport providers might have a level of control over content delivery that is anti-competitive (see my many blog posts on NetNeutrality for more on this). Some suspect more petty motives.
While they differ in some ways, this proposed merger does seem to have a lot in common with the Comcast + NBC Universal merger in that it is similarly a huge, vertical integration move – and that one was approved. Is that the precedent that is most applicable here?
My expertise is in Internet architecture (which is the "plumbing" on which this stuff depends) and not law, but for my part I believe both mega-mergers should have been denied as anti competitive and risky for consumers. Since we do have the precedent of the Comcast + NBC Universal, perhaps a fair way forward might be to approve this merger and then revisit the appropriate regulatory framework to protect consumers. Let’s not throw out Net Neutrality quite yet, folks. It might still have a very important role to play.
What’s your opinion? Leave a comment and let us know.
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