AT&T-Time Warner Merger Approval Draws Crowd - Multichannel
Many discouraging words from consolidation critics follow DOJ smackdown

Reaction was flooding in Tuesday after a judge said AT&T and Time Warner could merge, no conditions applied, and smacked down the DOJ's case in the process.

The Competitive Enterprise Institute said the judge got it right. “Today's decision is a win for consumers. The government failed to offer persuasive evidence that the transaction would harm competition or consumers.

Read more: AT&T, Time Warner Cleared to Merge

“Meanwhile, America's media sector has experienced a wave of deconsolidation and entry over the past three decades, so today's decision is a return to normalcy. Original video production is at an all-time high, a trend that industry observers have long recognized is unsustainable. By joining forces, AT&T and Time Warner will be better positioned to monetize content, in turn incentivizing the merged company to invest more in original programming. Meanwhile, satellite and cable providers such as Comcast, Charter/TWC, Cox, and Dish Network remain well-positioned to bargain aggressively with AT&T-Time Warner over the price of content. And with stand-alone internet video offerings such as Hulu, Amazon Prime, and Netflix all competing aggressively, there's no shortage of competition in the streaming space.”

But there were plenty of folks lining up to take aim at the decision, including smaller cable ops, edge providers and consolidation critics.

Related: AT&T-Time Warner Approval Could Create Deal Flood or Famine

Sen. Amy Klobuchar (D-Minn.) wants the government to fight the ruling.

“Allowing this merger to proceed raises serious concerns for consumers and the future of American media, and also sends a troubling signal to others that it’s open season for vertical mergers that could allow a company to raise the cost of essential products and services that its rivals need to compete, leading to higher costs for consumers and less innovation," she said. "I urge the Justice Department to take swift action to appeal this judgment to ensure that competition and consumers are protected.”

Related: DOJ's Delrahim Says Speech Tests Have No Place in Antitrust

Justice at press time had signaled it would have to review the decision first, but the judge reportedly picked apart the government's case and witnesses.

Also in the disappointed camp was the American Cable Association.

“The Court’s decision runs counter to numerous findings over the past 15 years by the Federal Communications Commission (FCC) and Department of Justice (DOJ) that vertical combinations between video programmers and distributors require robust conditions to constrain the incentive and ability of the combined firm to raise prices to rivals and reduce choice. For these reasons, the Court’s opinion is out of the mainstream.

“The FCC and DOJ should continue to rigorously review existing and proposed vertical combinations and impose sufficient remedies to offset their harms," ACA said.

Cable provider Cox Communications is hoping its customers and interests won't be hurt by the rollup: “We participated in the review process and expressed concerns about exclusive content and how that could unfairly tilt the competitive playing field and negatively impact consumer choice and pricing. We hope the government keeps a close eye on the merged company’s activity to ensure that consumers are not harmed. We’ll continue to aggressively invest in our network and products to compete in the communities we serve.”  

“AT&T is getting the merger no one wants, but everyone will pay for," said Chip Pickering CEO of INCOMPAS, whose members include competitive carriers and edge providers. "While the world focused on the merger, AT&T has been lobbying the FCC to cut off broadband competition in rural America and raise prices on consumers, small businesses and schools."

Pickering suggested that the FCC's elimination of net neutrality regs this week exacerbated the threat.

“Without question, a bigger, more powerful AT&T in a world absent net neutrality is a very, very dangerous proposition for consumers and content creators who have thrived during the streaming revolution."

"Judge Richard Leon just slammed the phone on American consumers and American democracy," said Robert Weissman, president of Public Citizen. "Not only will this merger deny choice and lead to higher prices for American consumers, it will weaken the economy by diminishing innovation in video distribution and content.

"Equally worrisome, it will spur a new wave of mergers that will give a small number of giant corporations an even greater chokehold over our economy and democracy."

Michael Copps, former FCC Commissioner and Common Cause special adviser, also commented.

“Justice denied is consumers skewered," said Copps. "This is a horse-and-buggy decision blind to today’s communications marketplace. The court’s decision blessing of the AT&T/Time Warner merger creates a communications behemoth that will raise prices for consumers, curb innovation, and reduce the amount of independent and diverse programmers in the video marketplace."

John Bergmayer, senior counsel at Public Knowledge, joined the chorus of boos from consolidation critics.

“This is a disappointing result, and we expect the government will appeal," he said. "In the meantime, not only may consumers be harmed directly by the anticompetitive harms that this merger will cause, such as higher bills and fewer choices of programming and provider, but also by the many other mergers it will encourage."

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