Given that the Trump administration has been tripping over itself to obliterate popular consumer protections (net neutrality, broadband privacy) and most media consolidation rules (largely to benefit Sinclair broadcasting), many analysts assumed that the administration would see absolutely no problem with AT&T’s latest $86 billion acquisition of Time Warner. After all, such vertical integration mergers — while they can cause very serious market harms — are often more difficult to make a case for than mergers where direct competitors are eliminated.
Supporting that position was the fact that Makan Delrahim, Trump’s new antitrust boss at the DOJ, had been on record previously stating that he saw no serious problems with the deal. That’s why it was a bit of a surprise last week when reports emerged that Trump’s DOJ was considering a lawsuit to block the megamerger, and may not approve the deal unless AT&T either sold off DirecTV (acquired last year) or Turner Broadcasting, owner of channels like Cartoon Network, TBS, and CNN.
“White House advisers have discussed a potential point of leverage over their adversary, a senior administration official said: a pending merger between CNN?s parent company, Time Warner, and AT&T. Mr. Trump?s Justice Department will decide whether to approve the merger, and while analysts say there is little to stop the deal from moving forward, the president?s animus toward CNN remains a wild card.”
So the idea that Trump would use the merger as leverage to take aim at CNN was clearly something that was on the table. But when asked about the decision while on Air Force One last week, Trump insisted that the decision wasn’t his, but was made by “a very respected person,” presumably Delrahim:
“Speaking to reporters on Air Force One, Trump said he ?didn?t make that decision ? it was made by a man who?s a very respected person, a very, very respected person…”I did make a comment as to what I think,? Trump also acknowledged. Previously, the president has blasted AT&T and Time Warner?s merger plans ? and during the 2016 election, he threatened to block the companies from combining under his watch.
“I do feel you should have as many news outlets as you can ? especially since so many are fake,” Trump continued, according to a pool report. Then, he concluded: ?I didn’t make a statement, but I did make a statement long before. So we?ll see ? that probably ends up being litigation, maybe not, we?ll see how it all plays out.”
Granted, forcing AT&T to divest either DirecTV or Turner Broadcasting makes sense from a regulatory perspective. Consumer advocates worry that AT&T’s greater size, leverage, and control over broadcast content (particularly HBO) will make it harder for streaming providers to license the content they need to compete. They’re also worried that AT&T will leverage this advantage — in concert with its monopoly in broadband and stranglehold over tower backhaul — to engage in more of the anti-competitive behavior it’s well known for (zero rating, etc.).
But it’s hard to square this return to sensible antitrust enforcement with an administration that has been taking a mindless hatchet to media consolidation and consumer protection rules. What kind of thought process involves seeing no problem with gutting media consolidation rules (which devastates smaller news outlets and media diversity), yet suddenly having a strong disdain for the often more-murky negative impact of vertical integration? One possible explanation for the policy asymmetry may reside with Rupert Murdoch, who has apparently been trying to get AT&T to offload CNN to News Corporation for much of the year:
“Rupert Murdoch telephoned AT&T Chief Executive Randall Stephenson twice in the last six months and talked about cable network CNN, sources briefed on the matter told Reuters on Friday. According to one of the sources, the 86-year-old executive chairman of Twenty-First Century Fox Inc offered to buy CNN in both conversations.
And again, if you head back to media reports from January, Murdoch had been pressuring the Trump administration to make life harder on AT&T Time Warner, a News Corp. competitor:
“If Fox News? politics ultimately solidify as more pro-Trump than they were during the campaign, that might be to the benefit of Murdoch?s business interests. According to a well-placed source, Trump has asked Murdoch to submit names for FCC Chairman. Murdoch, another source said, also wants conditions put on the AT&T-Time Warner merger, and he could lobby Trump to make that happen.”
Again, it’s entirely within the realm of possibility that an administration that has been protecting monoplists and gutting consolidation protections is having an uncharacterstic flirtation with sensible antitrust enforcement under Delrahim. But it’s also entirely possible, especially when looking at the administration’s behavior in full context, that Trump’s DOJ is giving AT&T a hard time simply to aid a political ally and to quash a critical media outlet.
For years, HBO and owner Time Warner fell into the trap of telling customers what they wanted instead of the other way around. You might recall that HBO and Time Warner spent years waging a rather scorched earth assault on piracy and other “unauthorized viewing,” going so far as to poison show torrents and shut down “Game of Thrones” viewing parties. A major problem with this approach is that HBO wasn’t fully providing pirates an alternative. While HBO was offering streaming to existing cable customers, it spent years ignoring consumer calls for a standalone streaming video platform that didn’t require cable.
There were any number of reasons for this myopia, the biggest being that like any good legacy company, HBO and Time Warner execs were afraid of wounding the traditional cable cash cow (even if said cow was already showing signs of notable mortality at the time). More specifically, HBO was afraid of hurting the cozy, heavily-subsidized relationship HBO enjoys with many cable providers, who all but give the channel away on occasional promotion. So while offering a standalone streaming platform was essential in evolutionary context, HBO consistently insisted it just couldn’t make the economics work for such an option.
So while Time Warner and HBO execs were busy trying to downplay cord cutting as a fad, the piracy of HBO programs continued to smash BitTorrent swarm and other piracy records. That was until March of 2015 when HBO was forced to finally acknowledge the changing tides and launched HBO Now, its standalone streaming app. Fast-forward a little more than two years, and that decision is looking pretty good now in hindsight:
The ?Game of Thrones? effect is in full force for HBO NOW, the premium network?s streaming service for cord cutters. According to new data from app market data provider App Annie, the iOS and Android versions of the HBO NOW mobile app have together generated $19 million in U.S. revenue for the two months containing the airing of ?Game of Thrones? Season 7, as of Monday, August 21.
App Annie says it expects HBO NOW?s mobile apps to pull in well over $20 million by the end of the month.
The show?s outsized popularity has again sent the HBO NOW app flying up the Top Revenue charts on the iOS App Store, too. Roughly one month after the Season 7 premiere, HBO NOW became the number one app in terms of Overall iPhone revenue. It grabbed that spot on August 16th, 2017, and remained the top app by revenue for two more days.
That’s pretty good for a service executives had to be dragged kicking and screaming toward, though you’d wonder how much more successful the platform could have been with an earlier start. And while “Game of Thrones” piracy is still booming, and HBO is still sending nastygrams to user ISPs in the hopes of thwarting it, at least HBO is now offering these users a legitimate alternative. An alternative that could provide more value over time if HBO experiments with price, or works on partnerships with smaller ISPs that have been contemplating getting out of traditional cable TV because they lack the leverage to compete with industry giants.
It’s a similar predicament that’s now facing ESPN, which, like HBO, spent years believing it could stand in the wings nursing its cash cow with a dumb look on its face while the entire pay TV ecosystem shifted under its feet. With cord cutting, phase one usually involves denying that the trend is happening, followed by acknowledging the trend but insisting it’s some kind of fad. That’s usually followed by the pretense that you saw and prepared for the trend all along despite all the data showing the opposite. It’s usually good to throw in some make believe about how you’re the one that gets to decide when to adapt for good measure
There’s no doubt that adaptation will make these companies less money over the short term, but executives often struggle to realize a core truth: they don’t have a choice. Cord cutting and the shift to IP video is happening whether these executives like it or not, and they can choose to stand mid-river in futile opposition to the flow, or adapt and take an early hit as the legacy cash cow dies, but be much better positioned for the future, whatever consumers determine they want it to look like.
Needless to say, consumer advocates and smaller competitors aren’t too keen on AT&T’s $89 billion plan to acquire Time Warner. They argue that AT&T’s long history of unethical behavior, empty promises, and anti-competitive shenanigans make it extremely likely the company will use its greater size and leverage to ill effect. They worry that AT&T will make it harder for competitors to license content necessary to compete with AT&T’s DirecTV Now streaming service, and arbitrary usage caps and other tricks like zero rating to similarly put competitors at a disadvantage.
Traditionally, these kinds of vertical integration deals aren’t blocked because it’s harder to clearly prove potential antitrust harm, even if AT&T has a thirty-year documented history of all manner of fraudulent behavior. On the campaign trail, Trump repeatedly promised that this was a deal his administration simply would not allow, given the “concentration of power” the deal would deliver:
“In an example of the power structure I?m fighting, AT&T is buying Time Warner and thus CNN — a deal we will not approve in my administration because it?s too much concentration of power in the hands of too few.
The fact that Trump’s FCC has become a rubber stamp for every shitty idea coming out of AT&T’s, Verizon’s and Comcsast’s collective heads should also likely clue people into which direction deal approval was leaning.
So not too surprisingly, media reports on the progress of the merger talks indicate AT&T’s conversations with antitrust officials have shifted from whether the deal will be approved to finalizing what, if any conditions will be affixed to the deal:
“The early-stage discussions suggest that government lawyers have nearly finished their months-long look at how AT&T, the biggest pay-TV distributor, would reshape the media landscape with its bid for the owner of CNN and HBO — and shows that the sides have moved on to talking about how they can make the merger work without harming rivals.”
More accurately, they’ve moved on to talking about how they can make it appear that the merger could work without harming rivals, since, as we’ve long documented, the conditions affixed to these kinds of deals are traditionally only theatrical in nature. More often than not, the conditions are proposed by these telecom companies themselves, often requiring that companies do something they’d already planned to do anyway. In AT&T’s case, it usually involves fudging their existing broadband deployment numbers, then promising a new broadband expansion that may or may not actually materialize.
We’ve documented how AT&T in particular is a long-standing professional at making all manner of bullshit promises if their mergers get approved, with regulators never really learning much of anything with hindsight. With Trump being no stranger to flimsy telecom promises of his own (his promise to block this deal being example A), the merger’s going to create a wonderful opportunity for bullshit synergies the likes of which we may never see again.
On the campaign trail, you might recall that Donald Trump threatened to block AT&T’s $89 billion acquisition of Time Warner, insisting that the deal was “an example of the power structure” he was fighting, because it would deliver “too much concentration of power in the hands of too few.” Granted he subsequently appointed an FCC chairman in Ajit Pai who’s little more than a rubber stamp for companies like AT&T, and nominated an antitrust boss already on record stating he has no real problems with the merger, leading most analysts to believe the deal will be approved anyway.
There are of course a number of legitimate reasons to block the deal, including concerns that AT&T will make licensing access to necessary programming more difficult than ever for streaming video competitors. Or the fact that AT&T’s using its dominance in wireless to give Time Warner content an unfair advantage over competitors via usage caps and overage fees (aka “zero rating”). It would be foolish to think a company with such a rich history of anti-competitive and anti-consumer behavior wouldn’t use this greater size and leverage anti-competitively.
But these are complicated nuances it’s not-terribly-likely the current President actually understands. Instead, his focus in recent months has been the fact that he doesn’t like Time Warner-owned CNN’s critical coverage of his administration, and, according to the New York Times, hopes to use the deal as “leverage” to force CNN to soften its critcism of the President as part of his broader assault on the media:
“White House advisers have discussed a potential point of leverage over their adversary, a senior administration official said: a pending merger between CNN?s parent company, Time Warner, and AT&T. Mr. Trump?s Justice Department will decide whether to approve the merger, and while analysts say there is little to stop the deal from moving forward, the president?s animus toward CNN remains a wild card.”
Other news outlets noted that the Trump administration is also contemplating demanding the ouster of current CNN boss Jeff Zucker in exchange for approving the deal. The news was quick to result in letters to the DOJ from several Senators who claimed Trump was “interfering” in an approval process that should be left up to regulators and the DOJ to decide:
“Any political interference in antitrust enforcement is unacceptable,” Minnesota Sen. Amy Klobuchar wrote in a letter to Attorney General Jeff Sessions. “Even more concerning, in this instance, is that it appears that some advisers to the President may believe that it is appropriate for the government to use its law enforcement authority to alter or censor the press. Such an action would violate the First Amendment.”
If you’re at all familiar with the ethical behavior over at AT&T (like the times it ripped off a program for the hearing impaired or made bills harder to understand to help criminals scam its own customers), it would certainly be in character for AT&T to agree to trample the editorial firewall between itself and CNN to get the deal done — it just wouldn’t be stupid enough to put any such agreement in writing. As the net neutrality fight makes clear, telecom giants aren’t particularly concerned about the whole free speech thing (check out Verizon’s first foray into tech content, for example).
AT&T’s also a world-class expert at making utterly bogus claims when it comes to its latest megamergers, consistently claiming such deals will lower prices, expand broadband coverage and create oceans of new jobs (telecom megamerger history makes it abundantly clear the exact opposite almost always occurs). Given some similar expertise over at the Trump camp, there’s an incredible opportunity for some amazing bullshit here; an opportunity Trump likely won’t want to waste by continuing what’s become an arguably unhealthy fixation on CNN.
The likely outcome is that we’ll get to have our rotten cake and eat it too: a torrent of bogus job and broadband expansion promises the likes of which we’ve never seen before — and a CNN left bridled by a meddling new corporate parent focused exclusively on currying favor in the Trump administration to anti-competitive benefit. Just think of the incredible potential for synergies…and bullshit.
Yesterday we wrote about coal company Murray Energy and its CEO, Bob Murray, actually following through and suing John Oliver — something that Murray’s lawyers had threatened to do when Oliver and his team had reached out to Murray for a piece Oliver was doing on coal. The result of being threatened was that Oliver spent nearly half of the 24 minute segment on Murray, carefully detailing some of Murray’s history and positions. If you missed it, watch it again here:
Anyway, when we wrote about the case yesterday, we noted that we had to do it based solely on the reporting of the Daily Beast, as they broke the story and — for reasons I still don’t understand — refused to post the actual complaint. However, now we’ve obtained the full complaint and can dig in on how incredibly silly it is. It appears to be a quintessential SLAPP lawsuit, where the entire point is not to bring a legitimate cause of action, but to chill free speech that criticizes Bob Murray. As Ken “Popehat” White notes, it’s “lawsuit as theater” and “an unapologetic political screed” — that is, apparently designed to rile people up, rather than to present a reasonable legal argument.
Let’s dig in. It certainly starts out on a high note with the rhetoric:
On June 18, 2017, Defendants executed a meticulously planned attempt to assassinate the character and reputation of Mr. Robert E. Murray and his companies, including Murray Energy Corporation and those in West Virginia, on a world stage. They did so for their personal financial gain by knowingly broadcasting false, injurious, and defamatory comments to HBO’s approximately 134 million paying subscribers, while also knowing that their malicious broadcast would be repeated to countless more individuals through various outlets (including other media owned by certain Defendants.
I’ve now watched the video four times and I fail to see anywhere that it goes after “those in West Virginia.” Indeed, it’s actually quite sympathetic to the plight of miners and former miners in the area who have run into problems or lost their jobs. The only people that it holds out as problematic… are the CEOs of various mining companies and the President of the United States. And even if Murray’s reputation is mocked in the piece, as long as there aren’t false statements of fact, presented with knowledge of their falsity or reckless disregard for the truth, it’s all perfectly legal. Making Bob Murray look foolish or mean isn’t illegal, as long as it’s based on statements of opinion or those backed up with evidence.
But, Murray’s lawyers appear to suggest that because Murray is in poor health, that somehow makes this entirely different. It’s… an odd sympathy play in a lawsuit:
They did this to a man who needs a lung transplant, a man who does not expect to live to see the end of this case. They attacked him in a forum in which he had no opportunity to defend himself, and so he has brought this suit to try to set the record straight.
The health stuff is pure “theater” as Ken noted. The “no opportunity to defend” himself is weird, because I thought Republicans like Murray were completely 100% against a “fairness doctrine” that required equal time for political opponents (which is the right position to take). But, even beyond that, the idea that Murray had no choice but to file a lawsuit to defend himself or to set the record straight is laughable. As Oliver’s report clearly showed, Murray is regularly on TV and could easily get a message onto the various TV news programs that have him on as a guest. And, either way (again) that’s got absolutely nothing to do with defamation law and how it works.
The sob story continues:
Worse yet, Defendants employed techniques designed solely to harass and embarrass Plaintiffs, including Mr. Murray, a seventy-seven year old citizen in ill health and dependent on an oxygen tank for survival, who, despite the foregoing, continuously devotes his life, including by working seven days each week, to save the jobs and better the lives of the thousands of coal miners that he employs in West Virginia and elsewhere. Defendants childishly demeaned and disparaged Mr. Murray and his companies, made jokes about Mr. Murray’s age, health, and appearance, made light of a tragic mining incident, broadcasted false statements, and incited television and internet viewers to do harm to Mr. Murray and his companies, all before a worldwide audience–including the thousands of people that work for and do business with Mr. Murray and his companies in West Virginia. In fact, medical doctors have informed Mr. Murray that he should stop working because the stress is shortening his life. Mr. Murray must, however, continue working because of all those individuals who rely on him. But nothing has ever stressed him more than this vicious and untruthful attack.
Bravo! Quite a performance there. This seems clearly targeted towards pulling at the heartstrings of folks in West Virginia, but, again seems to have little to nothing to do with the actual law. Again, Murray’s health is not an issue here — and if this has caused him more stress than anything else in his life ever, then Mr. Murray has led an incredibly low stress life. Is he really saying that a late night British comedian on a premium channel has caused him more stress than the time that one of his mines collapsed and killed a group of his employees? If so… that’s… weird. Separately, making fun of someone’s age, health or appearance (and I don’t recall any actual jokes about his age or health…) is, again, not defamation. It’s sort of protected by the First Amendment. The only thing that could be defamation is “false statements” and notice how the lawsuit seems to be playing up everything else, rather than that?
When you start to dig into the actual meat of the lawsuit… there’s almost nothing there. It complains that Oliver’s staff may have contacted Murray Energy under false pretenses, saying that they “were under the false impression that Defendants would use this supplied information to accurately and responsibly broadcast the facts and circumstances regarding the topics,” but that, again, makes little difference to the question of defamation. Just because a news company doesn’t present your version of the events exactly as you want it presented, doesn’t make it defamation. Not by any stretch of the imagination.
The lawsuit does provide plenty of additional bits of information concerning the Crandall Canyon mine collapse and how Murray reacted to it. And all of that is perhaps interesting, but again, none of it requires Oliver to portray the story in the way that Murray Energy likes. And, again, if you go back and review the actual story that Oliver did, he does not contradict any of the factual claims laid out by Murray’s lawyers. Rather, he highlights the stories of miners or families of miners who were impacted by the collapse and were not happy with how Murray responded. The crux of the argument on Murray’s side is “but we tried real hard.” And, great. But highlighting how others felt about the effort and actions is not defamation. It’s presenting other viewpoints.
The only possible “factual” point where there could be some controversy is over whether or not the mine collapsed due to an earthquake, as Murray has insisted since the day of the collapse itself. Oliver pointed to the US government report on the incident put together by the Mine Safety and Health Administration (MSHA), a part of the US Department of Labor. That report concluded: “The August 6 catastrophic accident was the result of an inadequate mine design,” and, on top of it: “MSHA found no evidence that a naturally occurring earthquake caused the collapse on August 6.”
In the lawsuit, Murray’s evidence that this is false seems to focus on semantics and making fun of the MSHA inspectors (you know they’re making fun of them because it puts “experts” in quote marks):
The Federal Mine Safety and Health Administration’s report regarding the collapse (the “MSHA Report”) contained multiple concessions that a sudden change in stresses due to a “slip along a joint” or “joint slip in the overburden,” which is very similar to the United States Geological Survey’s definition of an “earthquake” (i.e., “both sudden slip on a fault, and the resulting ground shaking and radiated seismic energy caused by the slip”), “could have been a factor in triggering the collapse” and was one of the “likely candidates” for triggering the collapse, but MSHA and its “experts” chose not to analyze the seismic data of the triggering event and instead focused on the secondary collapse, which was a disservice to the lost miners, their families and the truth.
Studies have shown that the Mine collapse was a seismic event originating in the Joe’s Valley Fault Zone. More specifically, these studies indicated that the triggering event for the seismic disturbance, which was not consistent with normal mining-induced seismicity resulting in the collapse, occurred on a subsidiary fault parallel to the Joe’s Valley Fault. This is a more technical manner of stating that the collapse was caused by what many would characterize as an earthquake.
So that first paragraph is nonsense. It’s not “actual malice” if you have clear evidence to back up your statements, and the official MSHA report sure seems like pretty good evidence to support that Oliver and his team believed what Oliver said was true. The fact that Murray doesn’t like the MSHA “experts” doesn’t magically make using their report “defamation.” Second, notice that all of the talk about the earthquake comes with qualifying language: “very similar to… definition of an ‘earthquake'”, “what many would characterize as an earthquake.” Even beyond the other stuff, this further undermines any defamation claim over the one sort of “fact” the lawsuit focuses on: if there’s a dispute over whether or not what happened was truly an earthquake, then choosing a side in that dispute is not defamation. It’s an opinion. That’s protected.
Mr. Murray and his companies warned Defendants to cease and desist from a broadcast of defamatory comments or any misguided attempt at humor regarding the tragic mine collapse and loss of life, which Plaintiffs believed would be cruel and heartless.
So, uh, earlier in the complaint, Murray’s lawyers argue that they believed that when Oliver and his team reached out they were ordinary journalists, claiming that they reached out “under the guise of responsible and ethical journalism.” And, yet, here they admit that that they knew that he’s a comedian who regularly satirizes people and companies, thus they didn’t want to see a humorous take on the situation. Also, there’s no law against “misguided” humor (and, uh, many folks found the humor to be quite on target). Finally, there is nothing in defamation law about it being illegal for you to have “cruel and heartless” comedy. And, in actuality, Oliver’s piece was neither cruel, nor heartless. Many would likely argue that it was incredibly sympathetic and empathetic to the plight of struggling coal miners, who are facing a radical transformation of their industry.
The complaint, once again, then hits on the idea that because Oliver’s story didn’t represent the collapse the way Bob Murray wanted it portrayed, that’s defamation. That’s… not how it works. It’s not how any of this works.
In the ensuing broadcast, Defendants deliberately omitted the facts Plaintiffs provided regarding the Crandall Canyon Mine incident. There was no mention of the efforts Mr. Murray personally made to save the trapped miners. Defendant Oliver did not tell his audience that Mr. Murray arrived at the Crandall Canyon Mine in Utah within four hours of the collapse. Nor did Defendant Oliver say anything about the twenty-eight straight days Mr. Murray then spent on that mountain overseeing the massive rescue efforts, and administering to the families. Nor did he mention that Mr. Murray personally led the rescue efforts when rescue workers were injured and killed in a subsequent event ten days after the initial seismic event, in fact pulling rescue workers from the debris and attending to their injuries with his own hands and administering to them.
That’s nice and all… but it’s totally meaningless. Not reporting those things is not defamation. Murray has every right to then put out a statement, or go on TV, or get another reporter to tell these stories. But in a lawsuit? Just because the story is about Bob Murray doesn’t mean that Bob Murray gets editorial control. That’s not how it works, Bob.
Then it gets even more bizarre:
Instead, presumably to boost ratings, line their pockets with profits, and advance the show’s anti-coal agenda, Defendant Oliver intentionally, falsely, and outrageously conveyed that Mr. Murray has no evidence to support his statements that an earthquake caused the tragedy that took the lives of Murray Energy miners during the course of their work for the organization.
Rather than fairly characterizing the evidence that he had in his possession on the subject, Defendant Oliver instead quoted an out-of-context snippet from a single report stating that there was “no evidence that a naturally occurring earthquake caused the collapse.” Because Defendant Oliver omitted any mention of the other reports he was aware of that evidence that an earthquake caused the collapse, as Mr. Murray correctly stated following the collapse, Defendant Oliver’s presentation intentionally and falsely implied that there is no such evidence.
Yeah. So, about that. The above just isn’t true. Watch the video again. Oliver directly says that Murray relies on other evidence to support the earthquake claim (“to this day, Murray says the evidence proves that he was correct.”) Then Oliver notes (correctly and accurately) that the government report says otherwise: “that was decidedly not the conclusion of the government’s investigation.” So, for Murray’s lawyers to argue that Oliver ignored the evidence on the other side is… simply not accurate. Oliver notes that Murray points to evidence on his side, but he then points to the government’s conclusions. Yes, Oliver makes it clear he believes the government’s report, but, um, it’s the US government. You’re not going to win a defamation lawsuit by arguing that relying on the conclusions of a federal government investigation is defamation, just because you have “other evidence” that you claim disagrees with the government’s evidence.
Worse still, as discussed, Defendant Oliver’s Senior News Producer, Defendant Wilson, obtained from Plaintiffs detailed information evidencing an earthquake or earthquake-like event did trigger and cause the Crandall Canyon Mine collapse.
Note the immediate caveats of an “earthquake-like event.” Again, this undermines the argument that saying a government report concluded it wasn’t an earthquake is somehow defamation.
They also did this despite knowing that determinations of causation are vastly complex and can take years before a reliable conclusion can be reached.
So, uh, yeah. About that. This is true, but remember, part of the joke here, from Oliver, was that Murray declared definitively in a press conference the day of the collapse that it was clearly an earthquake that caused this and not the company itself. So, if Murray’s own lawyers are now admitting that this is vastly complex and “can take years,” it sort of reinforces the key point that Oliver was making, that Murray himself immediately jumped to the conclusion that it was an earthquake and not his fault, when that was not at all clearly know. This filing seems to do more to undermine Murray than Oliver.
Defendants also aired a clip of congressional testimony of a relative of a former employee of Murray Energy that appeared to be dissatisfied with Mr. Murray’s handling of the Crandall Canyon Mine collapse, when upon information and belief the statements of that employee were not his own, but were instead scripted by adverse counsel in a lawsuit against Murray Energy and given to the employee to further the agenda of such counsel and their clients.
Right, so this is similar to the whole dismissing the MSHA report by calling its experts “experts.” Oliver accurately reported what this relative said. Who wrote it is immaterial. If what that relative said was defamatory, then Murray could go after that relative. But there’s no defamation in Oliver playing a clip of Congressional testimony. Again, that’s not how it works.
There’s a lot more in the lawsuit, which you can read below, but it pretty much all falls into the same issues as the parts described above. It’s no surprise that, looking over the website of Murray’s lawyers, they don’t list defamation as a specialty, but tend to focus on personal injury. There’s a lot of complaining and theatricality, but very little of substance, and nothing that I can see that comes anywhere close to defamation. And that makes this a pretty clear SLAPP suit, designed to chill the speech not just of Oliver and HBO, but of any other reporters looking to cover Bob Murray and Murray Energy. This is the nature of chilling effects created by SLAPP suits. They try to punish people for actually speaking out and sharing their opinion while scaring off others from doing the same.
Once again: this is an example of why we need much stronger anti-SLAPP laws at the state and federal level. Laws that require plaintiffs to pay up for filing bogus SLAPP suits, as a deterrent. And, again, one hopes that now that he’s facing such a lawsuit (which, as I’ve said from personal experience is no fun at all, no matter how sure you are that you’re in the right), John Oliver will become as outspoken in favor of anti-SLAPP laws as he’s been about other important issues.
This one is clearly no surprise at all, given that — as we wrote about just a couple days ago — Bob Murray and his company Murray Energy were threatening John Oliver with a SLAPP suit if Oliver’s satirical report about the coal industry was used to “defame, harass, or otherwise injure Mr. Murray or Murray Energy.” Of course, Oliver’s report did no such thing… but, alas, Murray has now sued Oliver, HBO, Time Warner… and the writers of the story. The lawsuit was filed in West Virginia state court. In my original post, I suggested it might be filed in Ohio, where Murray Energy is headquartered, but it does also have operations in West Virginia as well. Either way, as with Ohio, West Virginia is a state with no anti-SLAPP law.
Unfortunately, I don’t have the full lawsuit. The Daily Beast, which first wrote about the case has chosen — for whatever reason — not to post the document, which is pretty lame. However, having watched the John Oliver piece multiple times, I can’t see how any of it comes anywhere even remotely near defamatory. It falls into a variety of clearly protected categories, including opinion, satire and rhetorical hyperbole. The idea that there were materially false and defamatory statements that were put forth knowing they were false (or with reckless disregard for the truth) is laughable. There is no way that this lawsuit succeeds — but, as we’ve been pointing out — that’s not really the point of most of these kinds of lawsuits. SLAPP lawsuits are designed to create a chill on free speech, by making that speech costly. Obviously, HBO/Time Warner can afford this, and have access to great lawyers, so there’s almost no chance that Murray wins the lawsuit, but that’s not the point. It will still cost money and lots of time to deal with the lawsuit and that’s a hassle.
Murray Energy put out a bizarre statement that does little to support the idea that Murray has an actual case here:
The false and defamatory statements in this broadcast severely and destructively impact Mr. Murray, and all of Murray Energy, particularly our Mines in the State of West Virginia, where we are the largest coal mining employer in the State, as well as coal mining itself, one of the primary foundations of that State’s economy.
Murray Energy filed this lawsuit, in part, in order to protect these lives and family livelihoods from the further damage by people who do not want to see coal mined, and want all of those lives destroyed, and will stop at nothing, including lying and fabrications, to accomplish their goal.
This is… laughable if you actually watched the Oliver segment, which is clearly standing up for the workers in these mines, but pointing out how the interests of the bosses — such as Bob Murray — are often different than the workers, and highlights a few examples of employees of Murray Energy not appreciating the way Bob Murray ran the company and treated the employees. Similarly, disparaging coal mining itself (which the Oliver report really doesn’t even do) is not, in any way, defamatory.
The Daily Beast — while not posting the complaint — did get Ken “Popehat” White’s opinion on it:
?Overall I?d say it appears frivolous and vexatious,? he said. ?Any core of merit is buried in nonsense.?
?It does arguably cite one or two statements (like the bit about earthquakes) that could possibly be defamatory, since they involve fact,? he said. ?But for the most part the section describing the purportedly false statements is rambling and semi-coherent, mixing fact with opinion and insult.?
As White notes, the defendants will likely get the case removed to federal court, which should be fairly easy, as there’s diversity with most or all of the defendants being in New York, not West Virginia. Of course, it also depends which federal court they remove the case to — but in some sense, it won’t matter at all for anti-SLAPP purposes, since New York (the most likely other destination) has a very weak anti-SLAPP law and it would be tough to apply it here.
So, once again, we can only hope that out of this stupid situation, John Oliver will now become a proponent of much stronger anti-SLAPP laws. If his staff is looking into that issue, I’d be happy to point them to lots and lots of useful experts and resources on anti-SLAPP laws. It’s a big issue (that we’re living through ourselves) that needs more attention — the kind of attention that John Oliver is now uniquely positioned to help bring to it.
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.
AT&T continues to try and sell regulators on the company’s $100 billion acquisition of Time Warner, making all kinds of promises (few actually being true). Consumer advocates are highly wary of the deal, arguing that a more powerful AT&T (with its rich history of anti-competitive behavior and outright fraud) would be in a perfect position to hinder streaming competitors from licensing the content they need to compete. That’s of course when AT&T isn’t busy giving its own DirecTV Now service an unfair market advantage via zero rating and usage caps.
But AT&T’s path to merger completion just got a bit easier. Outlets had been noting for some time that an FCC review would only be triggered if AT&T attempted a transfer of the two dozen or so Time Warner satellite licenses or the station license for WPCH-TV in Atlanta. Avoid those, and you avoid even a possibility that the FCC could block the deal or saddle it with conditions. And that’s precisely what AT&T appears intent on doing according to a new regulatory filing with the SEC:
?Time Warner has conducted a review of all licenses that it holds that are granted by the FCC,? says the company. ?While subject to change, it is currently anticipated that Time Warner will not need to transfer any of its FCC licenses to AT&T in order to continue to conduct its business operations after the closing of the transaction.?
If, as AT&T contends, these licenses don?t need to be transferred — or if Time Warner divests itself of the licenses before merging — the companies seem to believe the FCC has no authority to intervene and review the merger.
The deal would still need approval from the Justice Department, but Donald Trump remains a bit of a wild card in AT&T’s equation. Trump promised to block the deal in the lead up to the election, claiming “it’s too much concentration of power in the hands of too few.” But Trump’s telecom transition team consists largely of folks interested in defunding and defanging regulators. These aren’t exactly the kind of folks who’ll be supporting government blockades of (or restrictive conditions attached to) telecom sector mega mergers. Neither is the most likely top FCC choice, Ajit Pai.
But there’s a wrinkle. Trump may still block the deal, just for reasons other than what he claimed on the campaign trail. A recent New York Magazine column on Megyn Kelly contained an interesting tidbit, noting that Trump has turned to News Corporation boss Rupert Murdoch for tips on choosing the next FCC boss. Murdoch’s also urging Trump to block the deal as a favor to Murdoch and his obvious competitive interests:
If Fox News? politics ultimately solidify as more pro-Trump than they were during the campaign, that might be to the benefit of Murdoch?s business interests. According to a well-placed source, Trump has asked Murdoch to submit names for FCC Chairman. Murdoch, another source said, also wants conditions put on the AT&T-Time Warner merger, and he could lobby Trump to make that happen.
In other words (assuming this report is correct), Trump could block the deal, but only to benefit Murdoch’s own news empire, and not because it would protect consumers, smaller competitors, or the media and streaming markets. There’s another possible factor as well. Bloomberg recently reported that Trump was opposed to the deal, but mainly because he’s still bitter about CNN’s coverage of his campaign — and CNN is, of course, part of Time Warner. So there are still more “personal” reasons why Trump may want to block the merger. That’s going to likely cause friction among Trump’s own telecom sector and tech appointees, who have made it abundantly clear they don’t want regulators doing much of anything outside of nodding dumbly and looking busy.
Regardless, AT&T remains publicly optimistic, insisting there’s just no way regulators would dare block its latest megamerger; it’s simply too fantastic:
“In the modern history of the media and the internet, the U.S. government has always approved vertical mergers like ours, because they benefit consumers, strengthen competition, and, in our case, encourage innovation and investment,” AT&T executive VP and general counsel David McAtee said of the transaction.
AT&T has spent the last few months fending off critics of its planned $100 million acquisition of Time Warner. Most critics say the company’s ownership of Time Warner will make it harder for streaming competitors to license the content they need to compete. Others warn that AT&T’s decision to zero rate (cap exempt) its own content gives the company’s new DirecTV Now streaming TV service an unfair advantage in the market. That’s before you get to the fundamental fact that letting a company with the endless ethical issues AT&T enjoys get significantly larger likely only benefits AT&T.
Responding to these criticisms, AT&T CEO Randall Stephenson spent the last few months repeatedly insisting that critics have it wrong, because the merger was allowing the company to introduce a new streaming video service that provides 100 channels of TV for just $35 per month:
“I’m not surprised [by the criticism]. They’re uninformed comments,” Stephenson said in response to a question from Wall Street Journal editor Rebecca Blumenstein at the newspaper’s WSJDLive Conference. “Anybody who characterizes this as a means to raise prices is ignoring the basic premise of what we’re trying to do here, again a $35 product we bring into the market.”
That $35 price point was used again and again by AT&T lobbyists and executives in selling the deal before Congress, the company insisting that only this new mega-merger could possibly make this kind of offer possible. Stephenson at several points proclaimed that the lower-cost option was “a way to drive pricing down in the marketplace,” — a surefire example of AT&T’s dedication to intense video competition.
It’s ironic then that the company is already backtracking and raising rates on its new streaming TV service.
As it turns out, that $35 for 100 channel offer was only a limited-time promotion. AT&T has already jacked the price of the service up to $60 per month as of January 9, and the company is already indicating that pricing for all of its streaming TV service tiers (despite now owning Time Warner content) will be going up sometime in the near future:
“After Jan. 9, new subscribers who sign up for DirecTV Now?s Go Big tier with after Jan. 9 will pay $60 per month. Existing subs will continue to pay the $35-per-month rate for now, but the company also said the fees may increase at some future date. In addition, ?channels, features, and terms (are) subject to change & may be discontinued without notice,? AT&T said in a notice on the DirecTV Now website.”
And this comes as the outgoing FCC is clearly warning that AT&T is using usage caps to give this new content an unfair advantage over streaming alternatives. So while AT&T is busy claiming the Time Warner Merger will help it disrupt and compete with traditional cable, it’s clear AT&T executives are more interested in building cable 2.0: the same old anti-competitive shenanigans and TV price hikes we all know and love, just with a shiny new layer of public relations paint. AT&T has a long history of bogus promises to get big deals approved, but it’s rare to see the company already falling short on its promises before the ink is even dry.
Earlier this year, AT&T announced that it planned to shell out $100 billion to acquire Time Warner. That comes on the heels of the company spending $70 billion to acquire DirecTV. Why is AT&T spending countless billions on content and a legacy satellite TV provider when the lion’s share of the company’s broadband network desperately needs upgrading? Because fixed and wireless broadband subscriber growth has slowed, and telco executives believe they need to turn to content and advertising (read: slinging videos at Millennials) to please investors.
Under fire for the anti-competitive repercussions of its latest deal, AT&T testified this week before the Senate Judiciary Subcommittee on Antitrust, Competition Policy & Consumer Rights. As you might expect, AT&T and Time Warner both breathlessly insist that there are absolutely no downsides to the companies’ merger, adding the deal would be an incredible boon to consumers and the video market alike:
“Together, AT&T and Time Warner will disrupt the entrenched pay-TV models giving customers more options, creating more competition for cable TV providers,? AT&T CEO Randall Stephenson said.
?By joining forces, we will accelerate the development and delivery of the next generation of video services that provide consumers with greater choice, convenience, value, and affordability,? Time Warner CEO Jeff Bewkes told lawmakers in prepared testimony.
The problem is that’s not really true. Most streaming providers are worried that AT&T, which just launched its new “DirecTV Now” streaming service, will make it harder than ever for streaming competitors to license the content (HBO, etc.) they need to compete. Similarly, many (including the outgoing FCC) are concerned that AT&T’s decision to zero rate this DirecTV Now content (exempting AT&T’s content from usage caps while still penalizing competitors) twists and distorts the open market. AT&T already effectively eliminated a TV market competitor when it acquired DirecTV. Now it’s tilting the playing field unfairly in its favor.
These concerns received fleeting lip service at this week’s hearing. Instead, the committee spent a significant amount of time listening to folks like Mark Cuban, who attended the hearing to lavish praise on AT&T’s latest mega-merger:
?We need more companies … with the ability to compete with Apple, Google, Microsoft, Amazon and Facebook. Delivering content to consumers in this app-driven world is not easy, it is very expensive and difficult. … Alone, it will be very difficult, if not impossible for either AT&T or Time Warner to compete with any of the companies I’ve mentioned. Together it will still be difficult, but a combined entity at least gives them a chance to battle the dominant players in the marketplace and increase consumer choice and competition for consumer attention.”
So one, AT&T is a massive telecom conglomerate that not only owns its own core and last mammoth nationwide network, but also is already the biggest TV provider in the country after its DirecTV acquisition. This scale provides AT&T immeasurable benefits in content negotiations, and the idea that it was in any way difficult for AT&T to compete in this space is laughable. That’s before you even mention AT&T’s incredible and often comedic lobbying influence on state and federal telecom and media policy. A helpless little daisy, AT&T is not.
And while DirecTV Now might bring some added streaming competition to the space, it’s not like Apple, YouTube, Hulu, Sling TV, Sony, HBO and countless other companies aren’t flooding into the streaming video space as well. The competition is already coming to this market. Another mega-merger doesn’t help this competition, it actively harms it. AT&T is a company with a long, rich history of anti-competitive behavior and defrauding its own customers on multiple occasions. That it will use this expanded size and power in an anti-competitive fashion isn’t theoretical. This is what AT&T does.
But zero rating is complicated. Understanding the perils of vertical integration and the threat of one company owning the content and the conduit is difficult. Realizing that AT&T all but owns state and federal government is inconvenient. As such, Cuban tried to trot out a somewhat bizarre little story in which he argues that the AT&T merger would be really wonderful for joe, beer-drinkin’ consumer, because, uh, algorithms:
“I would also like to point out one other important element of consumer choice that an AT&T and Time Warner merger would improve.
Each of the largest content companies I have mentioned so far, Facebook, Google, Amazon, Microsoft and Apple present much if not all of their content algorithmically. As a Facebook user I don?t get to pick what content I get to see in my newsfeed. I can try to influence it, but Facebook algorithms control what I see.
In the future, it won?t be algorithms that choose what we see, our choices will be driven by some form of Artificial Intelligence learning from trillions of disparate inputs.
Meanwhile, for those of us who still enjoy our TV the old-fashioned way, on our couch, cold beverage in one hand and remote in the other, there is a lot to be said for having a company that can afford to continue to offer us that choice. As much of a geek as I am, I like having the choice of searching through a programming guide to see what?s on rather than an algorithm telling me what I should watch. I think a lot of consumers would like to see that choice continue as well.”
So one, that entire story makes no goddamned sense. Because Apple, Google and Facebook use algorithms in their news feeds, it’s a good idea to let a company with a massive history of anti-competitive behavior grow immeasurably larger? AT&T somehow will provide us with purer access to programming guides free of the nefarious influence of Silicon Valley artificial intelligence? That’s so illogical I can’t even deconstruct the point Cuban’s trying to make. It’s like arguing that forest fires are good because pineapples exist.
Granted we’ve noted a few times that while Cuban has a solid grasp of a number of issues, net neutrality, telecom and media issues aren’t among them. As such, he should probably be the last person testifying on the subject before Congress. In fact in writing this piece, I stumbled upon something I wrote for Techdirt back in 2014 when (again) trying to highlight that Cuban doesn’t really understand net neutrality:
“Of course Cuban has already made his fortune. Were we to take 1995 Mark Cuban (who was busy building Broadcast.com) and transplant his business into the modern era under AT&T, Verizon and Comcast — you can be damn sure he’d be taking a very different approach to these issues. Cuban has spent a decade making it abundantly clear he doesn’t understand net neutrality, the telecom market or the potential pitfalls of these new cap exempt business models. Perhaps we should put Mark Cuban, Donald Trump and all the rest of the billionaires with plenty to say but little actual understanding in charge of the telecom industry. At least we’d get some entertainment value out of the equation while the Internet burns.
Clearly I opened a portal to another dystopian dimension, and for that I’m truly sorry.
