Legal Issues

by Karl Bode


Filed Under:
antitrust, doj, mergers, prices

Companies:
at&t, time warner



DOJ Continues To Point Out A Mega-Merged AT&T Will Jack Up Prices On Everybody

from the do-not-pass-go,-do-not-collect-$200 dept

AT&T recently defeated the DOJ's challenge to their $86 billion merger with Time Warner thanks to a comically narrow reading of the markets by U.S. District Court Judge Richard Leon. At no point in his 172-page ruling (which approved the deal without a single condition) did Leon show the faintest understanding that AT&T intends to use vertical integration synergistically with the death of net neutrality to dominate smaller competitors.

In fact, net neutrality was never even mentioned by the DOJ at the multi-week trial. Likely in part because the DOJ didn't want to highlight how the Trump FCC was screwing everybody over with one hand, while the Trump DOJ was allegedly suing AT&T to "protect consumers" with the other (some argue that Trump's disdain for CNN and adoration of Rupert Murdoch were the more likely motivators). But if you ignore the fact that AT&T plans to use its monopoly over many broadband markets (from residential to cellular tower backhaul) combined with the death of net neutrality to make life difficult for consumers and competitors alike, you're not paying any attention to history or to AT&T's repeated nods in that general direction.

During the first trial, you'll recall the DOJ and its hired economists repeatedly pointed out how AT&T's vertical integration and ownership of "must have" content (like HBO) would provide the Dallas-based giant every incentive to raise TV rates. AT&T lawyers laughed those findings off, then immediately proceeded to...raise rates and hammer users with bogus new fees as it attempted to deal with the massive debt incurred from the merger. Those rate hikes were a major reason the DOJ decided it should try and appeal Leon's initial ruling.

As the DOJ works on its appeal of Leon's ruling, the government continues to point out in filings (pdf) that all of its economic models show that AT&T's ownership of Time Warner and DirecTV will provide the company with endless opportunities to raise rates on competitors and consumers:

"The bargaining model is an accepted and reliable predictor of competitive effects in the pay-television industry, and Professor Shapiro used reasonable inputs to quantify the magnitude of cost increases that AT&T would impose on rivals through negotiations—and the consequent higher prices for consumers—separate and apart from the non-quantifiable harms of the merger, such as reduced choice and stymied innovation...Given the district court’s illogical conclusion that the merger will lead to no change in bargaining leverage, and its erroneous finding of no consumer harm, a remand is necessary."

One of the major problems here is that lobbying has weakened antitrust enforcement so severely, government lawyers are now trapped within very narrow confines of economic theory to prove a point that should be common sense (especially if you've watched AT&T do business for more than five seconds): AT&T has a long history of behaving anti-competitively, and being even larger is going to make that even easier. There's roughly a million examples out there showing how AT&T exploits and abuses its captive customers with an ocean of bad behaviors.

That this will get worse as AT&T grows larger and more powerful shouldn't be a hard argument to make, even for lawyers trapped in the narrow hallways of accepted economic theory. And again, this is all before you even get to the fact that AT&T lobbyists just convinced the FCC to neuter itself on demand for no adult policy reason beyond it was what AT&T executives wanted.


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  • identicon
    Anonymous Coward, 17 Oct 2018 @ 6:35am

    Laissez Faire Capitalism strikes again

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

  • identicon
    Anonymous Coward, 17 Oct 2018 @ 7:24am

    With apologies to Tom Lehrer

    We broke them apart

    In 1984,

    And they've hardly monopolized since then!

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

  • identicon
    ItAintRocketScience, 17 Oct 2018 @ 8:09am

    Time for class-action lawsuit against Ajit Pai

    Sue the bastard for everything he and his overlords have.
    Show the collusion in his personal ham-stringing of the net-neutrality reversal.

    Why the hell isn't Ajit already in prison for interfering with federal criminial investigations?

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

    • icon
      JoeCool (profile), 17 Oct 2018 @ 9:31am

      Re: Time for class-action lawsuit against Ajit Pai

      Because, like most high level politicians, he's good at covering his ass. You better believe he'll throw someone under the bus if it looks like he's being looked at, as he already did with that fiasco with the alleged DDOS attacks... and that merger with Sinclair. He tossed people under the bus on both those.

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

  • identicon
    Anonymous Coward, 17 Oct 2018 @ 8:13am

    _AT&T intends to use vertical integration synergistically with the death of net neutrality to dominate smaller competitors._

    They have synergized the eschaton.

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

  • This comment has been flagged by the community. Click here to show it
    identicon
    Richard Bennett, 17 Oct 2018 @ 9:01am

    Fuck you, Bodey McBodeface. Drink! Drink!

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

  • identicon
    Anonymous Coward, 17 Oct 2018 @ 9:33am

    pheew

    For a second there, I thought you were trying to say that mankind is greedy or something.
    All is forgiven.

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

  • icon
    ECA (profile), 17 Oct 2018 @ 10:59am

    All the smart people left..

    NO intelligent person wishes to be a politician..
    I wonder why.

    fighting off all the Shills, and payoffs, and backdoors and Pork barrels..

    Whats the first rule in city building??(computer games) TRY NOT to change the taxes to quickly..

    I get the feeling things are about to change...not for the better. As with the game, when yo change things Quickly..it goes STRANGE..

    Capitalism.
    Iv a debate going with a younger person who thinks Utopia can be made..and I show him how all the forms of gov/society can be Abused by Capitalism.. That control mechanisms and soforth HAVE to be put into place and HELD THERE..
    In the beginning, we set a few rules, as time went by we ADDED MORE to control things, because they got REAL creative.

    So, how much does it cost to ruin a nation and change it to the Capitalist dream?? ALLOT...of money and time..
    It didnt start yesterday..
    Guess where the money comes from..YOU PAID FOR IT..
    You start at the counties..then the states..Then the Major offices.. You find the agencies are easy to control, as no one notices them or their affect.
    Where do these people LOOK for information, WHO do they ask and pay attention to..

    And we paid for it all..INCLUDING THEIR TAXES..

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

  • identicon
    Anonymous Coward, 17 Oct 2018 @ 11:38am

    "fighting off all the Shills, and payoffs, and backdoors and Pork barrels.."

    I suspect there is an additional item required of political office, the existence of dirt upon one's self as this is how they control you. What was that movie .. oh yeah, The Firm. Law student signs up with what looks to be a reputable law firm only to find out they are a mob outfit who then sets him up with a spiked drink and a hooker. Leverage.

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

  • identicon
    Glenn, 17 Oct 2018 @ 2:39pm

    The merger may not particularly help consumers, but the DoJ under Trump is even more not helping consumers (aka citizens) of this country; so I'll go with the lesser of two evils myself.

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

  • icon
    Nemo (profile), 17 Oct 2018 @ 10:43pm

    AT&T sees itself as the legacy "Ma Bell"

    Who originally used its monopoly to rake in gobs of dependable profit - and believe it or not, the "dependable" part of it likely outweighs the "profit" part, at least in the minds of these fledgling monopolists.

    TR would look upon this situation, and the gov't's cringing, slovenly approach to it with disdain, if not disgust.

    But then, if both parties hadn't squandered that legacy for partisan purposes, we wouldn't be in this present predicament.

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


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