Apparently we’re supposed to sympathize with the CEO, and giant conglomerates like AT&T and Time Warner. They’re so beleaguered by changes in their core businesses that their only path to survival, so they say, is a merger valued at $85.4 billion that will keep their fleeing customers corralled.
Consumer advocates aren’t buying this. Politicians across the spectrum aren’t buying this — who would expect to find Donald Trump, the Hillary Clinton campaign and Democrats in Congress, who all are expressing doubts, on the same side of anything?
And you shouldn’t buy it.
AT&T ranks first in the nation as a provider of pay TV (following its 2015 acquisition of DirecTV). It’s the second-largest wireless company and third-largest broadband provider in the country. Time Warner is one of the nation’s largest content companies, the owner of CNN, HBO and Warner Bros., among numerous other entertainment and news offerings.
Knowing that they face great hurdles in keeping entertainment and news consumers from finding new ways to access content other than via their cable box, they’re aiming to keep them in the AT&T fold by using Time Warner content to enhance its appeal.
Putting these behemoths together raises the possibility that Time Warner’s competitors would be disadvantaged in getting their products to AT&T’s wireless and broadband customers: It’s obvious that this goal can be reached most effectively by making Time Warner content load faster and in better quality than rival offerings.
“I don’t see anything about this merger that would lower costs for consumers or increase choices for consumers,” says Todd O’Boyle, director of the Media and Democracy Project at Common Cause.
The very rationales for the merger point to the opposite outcomes. “Either it’s going to give its distribution networks [that is, AT&T’s broadband and wireless systems] an advantage, or it hopes to give its content an advantage,” says John Bergmayer, a telecommunications expert at the advocacy group Public Knowledge. “From the outside, favoring your content over others looks pretty anti-competitive.”