Reject this ‘wildly anti-competitive’ merger

Recent news reports indicate the Justice Department has threatened to derail AT&T’s attempted purchase of Time Warner. President Trump so dislikes CNN’s coverage of his administration that he apparently wants to compel Time Warner to spin off the cable news network or face legal uncertainty.

To be clear, if true, these reports mark yet another low in Trump’s ongoing war on the freedom of the press. Outrage at Trump’s attacks on the free flow of information are appropriate and timely. But we should not lose track of the fact that AT&T’s takeover of Time Warner, with or without CNN, would be wildly anti-competitive.

For too long, companies have sought vertical combinations because of purported pro-consumer synergies that never materialize.

Regulators, for their part, have largely looked the other way and ignored any potential anti-consumer impact of vertical integration. Meanwhile, the public interest suffered.

Marrying content and carriage creates online gatekeepers with all the wrong incentives. AT&T would have the incentive and ability to slow down or preclude access to online video services that rival HBO Now. Worse yet, would post-merger AT&T muzzle John Oliver’s Last Week Tonight on HBO? Would the satirist still be able to lampoon poor AT&T service, or champion strong network neutrality protections — which AT&T opposes? Would they prevent him from criticizing Trump?

The problems here go much deeper than late night television. In 2011, the government allowed Comcast to absorb NBC Universal in another “harmless” vertical merger.

Afterwards, Comcast was caught discriminating against rival cable channels and slowing down rival online video services. All the while, America tumbled down global broadband rankings. So much for “synergies.”

Simply put, marrying medium and message has a sorry track record. The Justice Department ought to reject this merger, but for reasons grounded in law, not political score settling.