A trend toward fewer, larger
companies
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| Image credit: CNN Money |
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.
Links:
- https://www.nytimes.com/2018/03/20/technology/att-time-warner-trial-explained.html
- https://en.wikipedia.org/wiki/Vertical_integration
- http://www.dcd.uscourts.gov/content/senior-judge-richard-j-leon
- https://www.bloomberg.com/news/articles/2017-11-21/at-t-merger-challenge-lands-with-judge-who-approved-comcast-nbc
- http://rapidgroove.blogspot.com/2017/11/net-neutrality-once-again-at-risk.html
- https://www.cnet.com/news/at-t-time-warner-trial-is-a-battle-with-doj-for-future-of-streaming-video/
- http://www.newsweek.com/will-trump-punish-cnn-holding-att-time-warner-deal-634348
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