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Almost as soon as AT&T and Time Warner confirmed their $85.4 billion merger over the weekend, consumer advocates in Washington, D.C., sounded alarm bells about the deal and members of Congress called for hearings.
That’s standard practice for big mergers, however, all of which go on to be reviewed by the federal government.
On its face, the merger appears to be vertical — meaning a company from one industry is acquiring a company from another. In this case, AT&T is mostly a distribution company, which owns a cellular telephone network and satellite TV provider DirecTV. While DirecTV does air some original content, it’s hardly a production company. Meanwhile, Time Warner owns such premium television and film content assets as HBO, Turner and Warner Bros.
Still, consumer advocates in Washington immediately took issue with the proposal.
“The sorry history of mega mergers shows they run roughshod over the public interest,” said former FCC Commissioner Michael Copps, now a special advisor to Common Cause and well-known public-interest advocate, as reported by Broadcasting & Cable. ”Further entrenching monopoly harms innovation and drives up prices for consumers. The answer is clear: regulators must say no.”
Gene Kimmelman, head of Public Knowledge, said: “[W]e see many competition concerns related to preferencing their own services and content in ways that may harm consumers.”
Kimmelman voiced one of opponents’ primary concerns about the merger: that a merged AT&T-Time Warner would preference its content on its network over that of other companies.
That also was a concern when Comcast purchased NBCUniversal, which the FCC approved in early 2011 with several conditions attached. Those required that Comcast make NBCUniversal’s programming available at fair terms to all video providers; that it allow over-the-top and other video providers, such as Netflix, fair access to its broadband networks; and that local programming remained protected, reported the New York Times.
The Senate Judiciary Committee said it would hold at least one hearing on the merger, which is fairly standard congressional practice around a big merger.
Republican presidential nominee Donald Trump seemed disinclined to approve the merger, saying on Saturday that these sorts of deals “destroy Democracy.” Trump also feels that media outlets have treated him unfairly during this election and doesn’t seem to feel favorable to them in general.
Peter Navarro, Trump senior economic advisor, said in a statement on Sunday that “[t]his oligopolistic realignment of the American media along ideological and corporate lines is destroying an American democracy that depends on a free flow of information and freedom of thought.”
Democratic presidential nominee Hillary Clinton spoke more simply, saying through a spokesman that “regulators should certainly look at the deal.”
Former Democratic presidential candidate Sen. Bernie Sanders (D-Vt.) took to Twitter to advise the federal government to kill the deal, although that’s unlikely.
Sen. Al Franken (D-Minn.) also immediately took issue with the deal, opposing it in letters to both FCC Chairman Tom Wheeler and Attorney General Loretta Lynch on Monday. Franken also opposed Comcast’s acquisition of NBCUniversal.
Still, AT&T and Time Warner seemed confident the deal would be approved.
“We look forward to discussing the many benefits of this transaction with our regulators,” said David McAtee, AT&T senior EVP and general counsel, according to B&C. “In the modern history of the media and the Internet, the U.S. government has always approved vertical mergers like ours, because they benefit consumers, strengthen competition, and, in our case, encourage innovation and investment.”
READ MORE: The New York Times, Broadcasting & Cable
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