Politics

by Karl Bode


Filed Under:
antitrust, doj, mergers

Companies:
at&t, cnn, time warner



The Right Choice For The Wrong Reasons? DOJ Sues To Kill The AT&T Time Warner Merger

from the highly-selective-empathy dept

If you've been paying attention, the Trump admninistration has been engaged in a frontal assault on everything from net neutrality to media consolidation rules, its legacy-industry-cozy policies driving a new wave of mergermania in telecom and media. As such, few thought the administration would block AT&T's $86 billion acquisition of Time Warner. After all, AT&T wasn't acquiring a direct competitor, and the harms caused by vertical integration -- however real -- haven't been a genuine concern in regulatory telecom oversight from either party for years (see Comcast NBC Universal or Sinclair Tribune).

But then rumors began to emerge that the Trump DOJ was contemplating suing to block AT&T's latest megamerger -- unless it was willing to sell either DirecTV (acquired by AT&T last year) or Turner Broadcasting, owner of CNN. Reports indicate that AT&T refused both options and was primed for a court showdown. This week the DOJ announced it would be giving AT&T what it wanted, and is taking AT&T to court to block the deal on antitrust grounds:

"Makan Delrahim, the department’s top antitrust regulator, said the Justice Department opposed the deal because it would create a communications and media behemoth unrivaled in its ability to reach most American homes with wireless and satellite television services and valuable programming such as CNN and HBO, the home to “Game of Thrones."

"This merger would greatly harm American consumers,” Mr. Delrahim, the assistant attorney general for antitrust, said in a statement. “It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy."

Consumer advocates have long opposed the merger, arguing that AT&T will use its greater size and leverage to amplify what already is a fairly solid legacy of anti-competitive behavior, including making it harder for streaming companies to gain access to the content (especially HBO) they'll need to compete with AT&T's DirecTV Now service. As such, many consumer groups were quick to applaud the lawsuit. Albeit with the caveat that they weren't entirely sure the Trump DOJ was doing this for quite the reasons it claims:

“It’s refreshing to see the Justice Department doing something about this deal. However, we remain very troubled by President Trump’s threats to punish outlets like CNN that have aired critical coverage of the administration. The Justice Department must demonstrate that Trump’s saber-rattling has nothing to do with this suit. It could start by giving the same level of scrutiny to other mega-deals like Sinclair’s proposed merger with Tribune. But the bottom line is that the public would be best served if this merger is scrapped."

Concerns that the Trump administration is (ab)using the DOJ for petty grievances and cronyism aren't unfounded. A Trump administration official in July told the New York Times that it was pondering using the deal as leverage against the network. And Rupert Murdoch has been pushing Trump to block the deal since at least January, worried that it would pose a greater competitive challenge to his own News Corporation empire. AT&T had rejected at least two Murdoch overtures to buy CNN in the last six months, which is why the DOJ may have wanted AT&T to divest Turner Broadcasting.

All told, it's hard to believe that a Trump administration that has an active disdain for consumer protections -- and is going well out of its way to aid the Sinclair Tribune deal -- is suddenly hyperventilating about the vertical integration antitrust ramifications of AT&T Time Warner. AT&T clearly smells something a bit fishy in the water, and is conducting an investigation into whether Trump pressured the DOJ to change its tune. After all, DOJ antitrust boss Makan Delrahim had, until the last few months, said he saw no problems with the deal. AT&T's also investigating Rupert Murdoch's role in the DOJ's sudden, breathless concern for consumer welfare:

"AT&T intends to seek court permission for access to communications between the White House and the Justice Department about the takeover, said the people, who asked not to be named because the deliberations are private...AT&T will also try to get any evidence about whether Rupert Murdoch tried to influence the review, according to one of the people. Murdoch, a Trump confidant, controls 21st Century Fox Inc., the parent of Fox News. The president has praised Fox News’s coverage of his administration."

AT&T's already making it clear that if there is dirty pool at play here, it will help it come out in the wash:

All told, this is poised to be one of the uglier legal showdowns in recent antitrust memory. And it's forcing folks aligned against the deal to ask themselves if the ends justify the means, even if cronyism and a frontal assault on the media -- not consumer welfare -- are fueling the court battle.


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  • identicon
    Anonymous Coward, 21 Nov 2017 @ 7:11am

    enemy's enemy

    Since NBC is even more anti-Trump than CNN, hopefully the administration can find some way to unravel that merger also.

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

  • icon
    duane (profile), 21 Nov 2017 @ 7:16am

    not good news at all

    The problem is you've got a well-documented history of judges taking Trump at his word and ruling against him on the basis of those words being hateful, racist, biased, illegal, or any combination thereof.

    I bet AT&T doesn't see this going any different. "Your Honor, Trump doesn't like us, so he's trying to mess with us. Exhibit A is his twitter history. Exhibit B is this phone call transcript where we asked him if he didn't like our merger because of CNN and he said yes. Exhibit C is whatever he says about us once he gets wind of Exhibits A and B. We rest our case."

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

  • identicon
    Anonymous Coward, 21 Nov 2017 @ 7:25am

    Ends &Means

    > "... to ask themselves if the ends justify the means.."


    If the End does not justify the Means -- then what does justify the Means ??

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

    • identicon
      Anonymous Coward, 21 Nov 2017 @ 8:50am

      Re: Ends &Means

      If the End does not justify the Means -- then what does justify the Means ??

      Good means taken towards good ends (e.g. paying someone a compliment when they're sad to make them feel better) justify themselves.

      Good means taken towards evil ends (e.g. paying someone a compliment in order to manipulate them into doing something they don't want to do) are inherently evil, though not as evil as any other means taken towards accomplish evil ends.

      Evil means taken towards evil ends (e.g. insulting someone because you enjoy their pain) cannot be justified.

      Evil means taken towards good ends (e.g. insulting someone in order to build camaraderie) are really the only plausible scenario where ends can be justified by means, and only when they meet the following criteria:

      • The means will (or probably will) achieve the ends (effectiveness),
      • The benefit from the ends outweighs the harm caused by the evil means (proportionality),
      • The means are the least evil way of achieving the ends (precision),
      • This analysis is being weighed for each individual instance of the means being used (as opposed to rubber-stamping based on previous instances where you found that similar ends justified similar means) (mindfulness)

      So, back to your question.

      The ends are always an important thing to take into account to determine if your actions can be justified, but the fact that your goal is good doesn't automatically mean that your actions are justified.

      In this case, the goal is to prevent a further consolidation of the US media market - something that most people would agree is a good end. The means, however, is assisting Trump to attack a news organization that he has declared an enemy for reporting (more-or-less) accurately on him. This could have serious chilling effects on other organizations who wish to report on Trump's misdeeds.

      Will helping Trump sink CNN really prevent further media consolidation (effectiveness)? Is preventing this merger really worth that outcome (proportionality)? Is there no other way to prevent this merger without risking those chilling effects (precision)? And are we letting our thoughts about other mergers make us oppose this one without properly weighing the consequences (mindfulness)?

      Those are the questions which will answer whether the ends are justifying the means, because good intentions are not enough to justify doing something that would otherwise be wrong - to do something nice, yes, but not something harmful.

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

      • icon
        Toom1275 (profile), 21 Nov 2017 @ 9:38am

        Re: Re: Ends &Means

        >In this case, the goal is to prevent a further consolidation of the US media market - something that most people would agree is a good end. The means, however, is assisting Trump to attack a news organization that he has declared an enemy for reporting (more-or-less) accurately on him

        It can also be argued that the ends and means are the reverse - that Trump's ends are to harm CNN and preventing a media-consolidating merger is the means.

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

        • identicon
          Anonymous Coward, 21 Nov 2017 @ 10:26am

          Re: Re: Re: Ends &Means

          Perhaps, but I was speaking specifically to the part of the post being quoted:

          And it's forcing folks aligned against the deal to ask themselves if the ends justify the means

          From Trump's perspective, the ends and means may be very well what you describe, but where the article is concerned, in the only place ends and means are mentioned, "ends" are pretty clearly referring to the goal of stopping the deal.

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

      • identicon
        Will B., 21 Nov 2017 @ 3:19pm

        Re: Re: Ends &Means

        This post is a perfect summation. Thank you so much, and I hope you don't mind me referring back to your words in future discussions on ends and means.

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

  • identicon
    Anonymous Coward, 21 Nov 2017 @ 7:30am

    "The right choice for the wrong reasons" also describes the administration dropping TPP. Nothing to do with how it's filled with deadly poison, rather the xenophobic belief that international trade is a zero-sum game, thus any benefit to another country must harm America.

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

    • identicon
      David, 21 Nov 2017 @ 10:36am

      Re:

      the xenophobic belief that international trade is a zero-sum game, thus any benefit to another country must harm America.

      Well, it's a plausible theory. I mean, global education is on the rise, and the U.S. elects Trump. That sure looks like a limit on total global intelligence, too.

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

  • identicon
    Anonymous Coward, 21 Nov 2017 @ 11:00am

    "...petty grievances and cronyism..."

    "Even a blind squirrel finds a nut once in a while."

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

    • identicon
      David, 21 Nov 2017 @ 11:12am

      Re: "...petty grievances and cronyism..."

      The blind squirrel is merely gyrating its nuts until the requisite bribes hail in. This is a deal screwing the customers out of billions of dollars, so there's got to be some palm nougat for the nutmegalomaniac.

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

    • identicon
      Anonymous Coward, 22 Nov 2017 @ 3:02am

      Re: "...petty grievances and cronyism..."

      "Even a blind squirrel finds a nut once in a while."

      It is important not to minimize the damage that the trump kakistocracy, is doing in the process here. It isn't just blindly stumbling on a good outcome, its actively destroying our institutions like the rule of law, separation of powers and the 1st amendment guarantee of a free press.

      Its more like a demolition company going around randomly blowing up buildings and then saying its all justified because now there are more parking spaces. Nevermind how much more valuable all those buildings were.

      Imagine if the end of fight club wasn't just the destruction of the bank building, but also a whole bunch of apartment buildings, the library of congress and museum of natural history. Its the modern, westernized version of ISIS blowing up all those historical artefacts in the cities it was occupying.

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


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