PULLING THE PLUG ON MERGER
AT&T-Time Warner deal bad for consumers
Federal regulators should swiftly and decisively block AT&T from acquiring Time Warner — and Congress should move to ban telecom companies from owning the content creators. Period.
We’re on the precipice of an era of damaging mega-mergers that might look good in the short term — bundled subscriptions that seem like a good deal, increased ease of access to the shows you like — but make no mistake that in the long term, consumers will pay the price for allowing these oligopolies to take shape.
AT&T should not have the ability to shape the media as well as the delivery methods of that media. If the deal is allowed, AT&T could pull its new properties HBO and CNN from competing providers, putting consumers in a difficult position and setting off a war of content that will leave subscribers with impossible choices and sky-high subscriptions. It’s anti-competitive and unAmerican.
AT&T has been on a conquering kick for a while. In 2011, the company tried to buy T-Mobile in a $39 billion deal, but opposition from the Federal Communications Commission and the Justice Department quashed that merger. Years later it bought satellite TV provider DirecTV.
Based on recent history, this deal has all the makings of a failure. The best example: In 2015, Comcast Corp. was forced to abandon its $45 billion bid to buy Time Warner Cable after the FCC staged opposition over creating a cable company and internet provider with astonishing control over Americans’ digital experience. The FCC essentially sent a good message that telecom giants should rent, but not own, content.
So maybe this deal won’t go through, and maybe the parties involved know it’s a long shot. Perhaps their decision to roll the dice was bolstered by knowing that both would reap short-term financial benefits either way: An immediate trading bump is almost guaranteed, thanks to the shallow logic and utter predictability of a knee-jerk Wall Street.
Then again, the deal could be approved. It was only last year that AT&T gained government approval to buy DirecTV for $48.5 billion.
The inexcusable green light on that mega-deal means that if this proposed AT&T merger is approved, Comcast will have a harder time competing. That’s not necessarily a bad thing unless you really consider what it means for Comcast to be in fight-or-flight mode. Having been accused of choking the airwaves of its competition in the past, slowing down Netflix is just a small hint of what could befall Comcast subscribers, in my opinion, if the deal goes through.
The merger has become an issue in the presidential election, with billionaire real estate developer Donald Trump vowing to block the deal if he wins, saying it’s “an example of the power structure I’m fighting.”
Trump has also pledged to break up NBC and Comcast, saying it is an example of a deal that is “poison” to democracies.
It’s up to consumers and voters to keep the pressure on Democratic nominee Hillary Clinton to take a position on the merger. With polls showing she’s in the lead, this may be voters’ last chance to get her to commit. Plus, it’s strategically to her benefit. Strong opposition to the proposed deal by Clinton could encourage Bernie Sanders supporters to show up for her on Election Day. Otherwise, it looks like Trump is channeling Sanders in his strident opposition to mega-mergers that could result in huge price jumps, threaten net neutrality and have grave consequences for years to come.
I don’t know about you, but I’m not ready to live in a world where “Game of Thrones” is brought to you by AT&T.