It’s been quite some time since we heard about AT&T’s planned acquisition of Time Warner, but today the deal is forcing its way back into the spotlight. As it turns out, there might be some strife between AT&T and US regulators when it comes to the merger. That much should hardly be surprisingly, as Time Warner and AT&T are two already monolithic companies, so having the two in talks to become one would definitely get regulators’ attention.
Reuters reports today that the Justice Department has recommended that AT&T either sell off DirecTV or CNN if it wants to see this deal go through. AT&T, unsurprisingly, has been resistant to both of those requests, and AT&T CEO Randall Stephenson has also said that he’s willing to take the US to court if regulators can’t come up with a good settlement. “If we feel like litigation is a better outcome then we will litigate,” Stephenson said.
Over on The Hill, though, we hear quite a different story. Stephenson says that the Justice Department hasn’t asked him to sell Time Warner’s broadcasting arm, nor did he ever offer to do so. Regardless of all the back and forth, the fact that this deal is now surfacing once more is a good reminder of just how worried we should be if we see it go through.
According to that Reuters report, regulators and competitors are worried about AT&T owning Time Warner’s broadcasting business. The concern is that AT&T may force its competitors to pay higher prices to broadcast Time Warner’s content, which the consumer would presumably feel one way or another. Even if those costs weren’t passed along to the consumer, AT&T charging other companies more to broadcast those channels would still play a part in stifling competition.
Things get even more worrying when you realize that Time Warner owns HBO and Warner Bros. It’s bad enough to think that AT&T might end up controlling CNN and HLN and charge its competitors more for the privilege of carrying them, but when we throw HBO and Warner Bros. into the mix, the potential for AT&T to become underhanded with on demand content becomes all the greater.
Should AT&T succeed in its acquisition of Time Warner, it would suddenly hold a pretty significant share of the media market. It’s enough to make you long for the good old days when the government actually forced AT&T to split up over the fact that it had become a monopoly. It’s clear that the government needs to put a stop to this merger, but the big question now is whether or not it actually will.