Legal Issues

by Karl Bode


Filed Under:
antitrust, doj, fcc, mergers

Companies:
at&t, time warner



In Dodging FCC Review, AT&T's Time Warner Mega-Merger Just Got Much Easier Under Trump

from the merge-ALL-the-things! dept

There are about 100 AT&T lobbyists currently making the rounds in Washington, trying to convince regulators and the press that the deal will provide an incredible boon to consumers. The folks who actually try to protect consumers aren't so sure, arguing that a larger combined company could make it harder than ever for streaming competitors to license the content they need to compete with AT&T (and its own streaming service, DirecTV Now). And that's before you even get to the fact that AT&T's using usage caps to give its own services an unfair leg up in the market (aka zero rating).

But AT&T's path toward deal approval just got notably easier. While the deal will be reviewed by the DOJ, AT&T and Time Warner are configuring the deal so that it doesn't trigger any of the requirements for FCC review. As it stands, the FCC's jurisdiction would only extend to the deal with the transfer of certain spectrum licenses, or one of Time Warner's TV stations in Atlanta. But Time Warner just got done stating they'd be selling that station ahead of the merger. And new FCC boss Ajit Pai says he doesn't see the need for FCC involvement in the review process:

"Pai said that because the transaction will involve no license transfers, the merger would not come before the FCC. Last week, Time Warner said that it would sell its sole broadcast station, WPCH in Atlanta, to Meredith Broadcasting for $70 million. "That is the regulatory hook for FCC review. My understanding is that the deal won’t be presented to the commission.” Pai’s remarks came at the Mobile World Congress on Monday."

That, of course, leaves whether AT&T's latest mega-merger gets approved solely in the hands of the DOJ, with Trump as the wildcard. There's a certain segment of analysts that still thinks that Trump's disdain for Time Warner-owned CNN's news coverage could kill the deal (the President repeatedly promised to reject the deal on the campaign trail). But it's not clear these analysts quite understand the "synergies" this merger will provide AT&T (historically a pro at making bogus merger promises) and Trump (also an apparent expert at taking credit for job creation he had nothing to do with).

Trump and AT&T would be like a 70s supergroup -- with bullshitters instead of musicians. As such, I'd imagine the deal gets approved by the DOJ, but under an absolute cavalcade of public relation bloviation the likes of which we've never seen before -- all promising that the deal will create jobs, protect the nation's children, expand broadband deployment, and save the planet from potential alien invasion. AT&T, for its part, continues to promise in letters to concerned Senators (pdf) that this latest mega-merger is all "about giving consumers what they want":

"Put simply, this merger is about giving consumers what they want. Together, AT&T and Time Warner will create exciting new ways for consumers to enjoy video anytime, anywhere, and on any device, with unprecedented levels of customization and interactivity. The merger will allow us to offer customers more attractive bundles of broadband and video services, prodding cable companies and other competitors to respond by improving their own services. And the merger will further incentivize AT&T and other wireless carriers to deploy lightning-fast 5G wireless technology faster and deeper in their networks. As a result, this deal will increase competition and accelerate the innovation/investment cycle, all to the benefit of American consumers."

Doesn't that sound lovely? While reports still seem to suggest Trump personally opposes the deal, he's been appointing regulator chiefs at most key agencies that pride themselves on a "light regulatory touch," and for whom blocking such a deal would be dramatically out of character. Ultimately, it's likely that the opportunity for bogus job creation claims will be too hard for Trump to ignore, resulting in some cognitive dissonance gymnastics among those Trump supporters who actually took his campaign pledges to thwart harmful media consolidation seriously.


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  • icon
    That One Guy (profile), 8 Mar 2017 @ 5:32am

    Dodging a non-existent bullet

    When you consider who's currently running the FCC, I don't actually see any real difference between having to get the FCC and DOJ to clear the deal and just having the DOJ do it.

    The odds of Pai saying 'no' to anything the companies he's (theoretically) in charge of keeping in check is so close to zero as to be indistinguishable from it, so the only difference really is that not having the FCC involved makes him slightly less likely to gush about how absolutely awesome such a merger would be.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 Mar 2017 @ 6:27am

    Put simply, this merger is about giving consumers what they want.

    They misspell 'we' as 'they'.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 Mar 2017 @ 6:33am

    State Actors rewarded

    These companies work directly with the government to turn your data into searchable metadata. Their reward is to grow so large, that they are the monopoly again.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 Mar 2017 @ 6:35am

    Taco Bell was the only restaurant to survive the franchise war

    So?

    So, now all restaurants are Taco Bell

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 Mar 2017 @ 7:16am

    Will you be consistent about ALL corporations that have unfair advantage and apply it to Google, Microsoft, and ALL others?

    Google and Microsoft have inarguable advantages of near monopoly (and are both much bigger than ATT) and use it to promote, cross-promote, and in every way use it to sole advantage.

    Or just targeting ATT? If so, why?

    reply to this | link to this | view in chronology ]

    • identicon
      Wendy Cockcroft, 9 Mar 2017 @ 6:05am

      Re: Will you be consistent about ALL corporations that have unfair advantage and apply it to Google, Microsoft, and ALL others?

      As PaulT pointed out this is a public forum. I'll bite.

      1. While Microsoft does indeed enjoy a near monopoly it doesn't enjoy a full monopoly; other operating systems exist and are in use. There aren't regulations in place preventing municipalities from using OS or encouraging others to use it — or other proprietary systems. We can easily set up any OS we choose on our computers without having to get rid of Windows. Heck, you can even search for them on Bing, MS's search engine.

      2. RE: Google, ditto. Other search engines exist. Heck, Yahoo is the default search engine on Firefox, my browser of choice. What monopoly? That most of us choose to use it is down to our personal choices. That's particularly true if you use Internet Explorer; Bing is their default search engine.

      3. This article. Is about. AT&T. Because...

      ...the proposed mega-merger will create actual monopolies in those areas in which they've persuaded state governments to block competition.

      Microsoft and Google have plenty of competition. That they struggle to make headway is not due to MS or Google engaging in anti-competitive practices (any more, though that used to be true for MS).

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 9 Mar 2017 @ 11:57pm

        Re: Re:

        By the by, the site seriously needs to post all the junk out_of_the_blue says at once so it can be accurately treated by readers and moderated, instead of open posts like these slipping through the cracks.

        reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 8 Mar 2017 @ 7:17am

    Will you be consistent about ALL corporations that have unfair advantage and apply it to Google, Microsoft, and ALL others?

    Google and Microsoft have inarguable advantages of near monopoly (and are both much bigger than ATT) and use it to promote, cross-promote, and in every way use it to sole advantage.

    Or just targeting ATT? If so, why?

    reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 8 Mar 2017 @ 7:53am

      Re: Will you be consistent about ALL corporations that have unfair advantage and apply it to Google, Microsoft, and ALL others?

      "Google and Microsoft have inarguable advantages of near monopoly"

      There's plenty to argue there, actually. It helps if you don't start off with a false premise.

      For a start - define monopoly and define the market you're talking about. Then, consider the difference between AT&T having zero competition or only competing with Time Warner in many areas, and the level of competition that both Google and Microsoft have in the majority of their markets. Then, of course, consider the many articles on this site that are critical of both companies.

      reply to this | link to this | view in chronology ]

      • This comment has been flagged by the community. Click here to show it
        identicon
        Anonymous Coward, 8 Mar 2017 @ 7:56am

        Re: Re: Will you be consistent about ALL corporations that have unfair advantage and apply it to Google, Microsoft, and ALL others?

        So answer for Pault is NO, you won't be consistent, will try to dodge and carp and hedge and semanticize. Thanks.

        Now will Techdirt answer at all?

        reply to this | link to this | view in chronology ]

        • icon
          PaulT (profile), 8 Mar 2017 @ 8:02am

          Re: Re: Re: Will you be consistent about ALL corporations that have unfair advantage and apply it to Google, Microsoft, and ALL others?

          This is a public forum,if you want a private conversation with the Techdirt staff you have other ways of doing so. They are also under no obligation to answer whatever random prick trying demanding they do.

          But, at least you've indicated that you have no interest in an actual discussion of facts. Poor baby, were they mean to another corporation you worship again?

          reply to this | link to this | view in chronology ]

          • This comment has been flagged by the community. Click here to show it
            identicon
            Anonymous Coward, 8 Mar 2017 @ 8:20am

            Re: Re: Re: Re: Will you be consistent about ALL corporations that have unfair advantage and apply it to Google, Microsoft, and ALL others?

            I'm not going to argue mere semantics with Techdirt's top dog! Clearly you and I disagree on fundamentals, like whether water is wet.

            reply to this | link to this | view in chronology ]

            • icon
              PaulT (profile), 8 Mar 2017 @ 8:30am

              Re: Re: Re: Re: Re: Will you be consistent about ALL corporations that have unfair advantage and apply it to Google, Microsoft, and ALL others?

              Yeah, you seem to be implying that water is some kind of powdery substance but think that you're saying it contains moisture. I'm just trying to ascertain how you came to that conclusion.

              If you post in a public setting, you don't get to complain about which member of the public responds. You also don't get to demand that another specific person does. Sorry if reality hurts your feelings that way.

              reply to this | link to this | view in chronology ]

            • icon
              Ninja (profile), 8 Mar 2017 @ 8:30am

              Re: Re: Re: Re: Re: Will you be consistent about ALL corporations that have unfair advantage and apply it to Google, Microsoft, and ALL others?

              Clearly he deals with hard facts instead of delusions derived from smelling used socks.

              reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 8 Mar 2017 @ 7:57am

      Red herring

      Tell you what, when/if Google or Microsoft are involved in a merger with an equally large company, such that the consolidation stands to make the public worse off, then that's a point to consider. AT&T is being 'targeted' because they're one of the two companies involved in the proposed merger that's being considered now, not at some hypothetical point in the future.

      On a slight tangent, I'm curious as to how you think Google has a monopoly, and on what, keeping in mind that 'having a large or even majority marketshare because you offer a popular service' isn't part of the definition of a monopoly.

      reply to this | link to this | view in chronology ]

      • icon
        PaulT (profile), 8 Mar 2017 @ 8:15am

        Re: Red herring

        "I'm curious as to how you think Google has a monopoly"

        This comes up a lot when people want to insert false equivalence into an argument about monopoly. The major disconnect is that they can't see the difference between the type of quasi-monopoly that Google has in some markets (where, for example, they have a lot of competition in search, but people naturally go to Google even though there's nothing preventing them from using a competitor) and the type of monopoly we're referring to with regard to these ISPs (many people either have zero choice or only a couple of choices between ISPs that often collude with one another).

        They usually disappear when challenged on their assertions or start whining about some sort of Google conspiracy. Amusingly enough, until recently I've most often encountered these kinds of argument in defence of Microsoft. I guess they're no longer considered the "victim" now that they've adjusted their business to include open source and inter-connectivity.

        reply to this | link to this | view in chronology ]

    • icon
      Ninja (profile), 8 Mar 2017 @ 8:28am

      Re: Will you be consistent about ALL corporations that have unfair advantage and apply it to Google, Microsoft, and ALL others?

      You can go without Google. Not so much with AT&Warner (which will be the actual single option if merged in many places). Will you stop being a moron and acknowledge simple facts?

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 8 Mar 2017 @ 9:29am

      Re: Will you be consistent about ALL corporations that have unfair advantage and apply it to Google, Microsoft, and ALL others?

      I'd like to argue the advantages of a near monopoly with you.

      Please explain what you mean? I disagree that they have a monopoly at all.

      Do you just leap to defend AT&T? Or do you have a larger point? If you read Techdirt regularly you will notice that they are very critical of any company that tries to fuck over the consumer.

      Is AT&T immune to criticism?

      If you'd like some Google criticism I'll give you some. Personally I don't care for what Google does with our data. But they don't actively seem to be fucking over the average consumer. It doesn't cost you anything to use their services and you don't have to use them at all if you don't want to.

      Are you mad that Bing isn't a verb like Google is? Is that the monopoly you're talking about?

      Maybe you should do some research using a search engine like Yahoo or Ask. That will probably help you.

      Good luck!

      reply to this | link to this | view in chronology ]

    • identicon
      Thad, 8 Mar 2017 @ 10:39am

      Re: Will you be consistent about ALL corporations that have unfair advantage and apply it to Google, Microsoft, and ALL others?

      You know, last week when I made a joke about "If this thing was a different thing, would it be the same thing?", I intended it as a one-off, not for it to become my friggin' catchphrase.

      And yet, people keep giving me cause to repeat it.

      reply to this | link to this | view in chronology ]

  • identicon
    STJ, 8 Mar 2017 @ 7:46am

    time to get a job?

    Is it a good time to get a job with time-warner? Everything gets folded into ATT and I get lost in the shuffle?

    reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 8 Mar 2017 @ 8:34am

    "but under an absolute cavalcade of public relation bloviation the likes of which we've never seen before"

    I'm not really sure what "cavalcade of public relation bloviation" means but I intend to add it to my daily vocabulary. It almost makes me want to see the prospect of a Comcast/AT&T/Time Warner merger to see how you'd describe it.

    Ahem. Good article by the way.

    reply to this | link to this | view in chronology ]

    • icon
      orbitalinsertion (profile), 8 Mar 2017 @ 8:54am

      Re:

      I'm not really sure what "cavalcade of public relation bloviation" means...

      I think he means that AT&T commercial with the fireflies from several years ago.

      but I intend to add it to my daily vocabulary.

      It seems like it would be more insanely useful a thing than ever in the current climate. I could even go for it on a t-shirt in some form.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 8 Mar 2017 @ 9:11am

        Re: Re:

        You mean a shirt that reads:

        I see through the cavalcade of public relation bloviation that the consumer will ultimately get the shaft.

        reply to this | link to this | view in chronology ]

  • icon
    ThatFatMan (profile), 8 Mar 2017 @ 11:45am

    Call me crazy, but I'm sure if they spent the $88 Billion (or whatever obscene amount of money is on the line here) on research and development, they could probably come up with some actual innovation that benefits both customers AND AT&T. I'm failing to see, and they are failing to tell us, exactly why they need Time Warner to innovate in the first place.

    reply to this | link to this | view in chronology ]


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