AT&T’s Time Warner deal brings Trump, Democrats, consumer groups together in opposition

20 March 2017 1:27pm

7 December 2016. 

The proposed AT&T-Time Warner merger has created an unlikely alliance opposed to it: US President-Elect Donald Trump, leftist Democrats and consumer advocates.

Both Trump and groups such as Public Knowledge and Free Press have said the $85.4 billion deal would further consolidate a media industry already too dominated by just a few conglomerates.

Agreement between consumer groups and a corporate-friendly Republican — especially one who ran for president touting his business acumen — is extremely rare. But Trump's election has upended the political order of liberals and conservatives; populist us-versus-them views are ascendant in both parties.

US Senator Bernie Sanders of Vermont, whose Democratic presidential campaign vilified Wall Street and big corporations as did Trump's, said the deal should be killed because it would lead to higher prices and fewer viewing choices. US Senator Elizabeth Warren of Massachusetts, one of Democratic nominee Hillary Clinton's chief attack dogs against Trump during the campaign, also has raised concerns about the transaction.

Deal opponents had the opportunity to let their displeasure be known to senior AT&T and Time Warner executives Wednesday at a US Senate Judiciary antitrust subcommittee hearing.

Executives of both companies have defended the deal as a way to better design content for wireless devices.

AT&T and Time Warner, though, are confronting a shifting political landscape in which for the first time in recent memory, important Democratic, Republican and consumer-advocate voices agree that companies in many industries have gotten too big at the expense of average Americans.

Wednesday was "the first formal evidentiary hearing on one of the central issues of the election" — industry consolidation, said Mark Cooper, research director for the Consumer Federation of America.

Appearing were CEO Randall Stephenson of AT&T; Time Warner CEO Jeffrey Bewkes; Mark Cuban, chairman of AXS TV; Public Knowledge CEO Gene Kimmelman; and Daphna Ziman, president of Cinémoi, a movie and lifestyle network*

The merger's critics leave little doubt about what that central issue is with regard to the media.

"If you're not a Time Warner shareholder, if you're not a senior executive, if you're not a Wall Street banker, there is very little in this deal for you except higher prices and a new gatekeeper over what you watch, see, hear and read every day," said Craig Aaron, president and CEO of Free Press, in an Oct. 28 Democracy Now! interview.

The words are similar to the ones Trump used to condemn the deal on the campaign trail in October. He said his administration would block the merger outright because it created "too much concentration of power in the hands of too few."

He also vowed to take apart cable provider Comcast's 2011 acquisition of NBC Universal, calling it "one massive entity that is trying to tell the voters what to think and what to do."

The sentiment isn't too far off the comments of John Bergmayer, Public Knowledge's senior staff attorney. In an Oct. 21 statement, he said the "vertical integration" of AT&T's services with Time Warner's programming would give the merged company the ability to either put rival content at a disadvantage on AT&T's networks or make it harder for distribution competitors to acquire Time Warner programming.

The view is gaining credence among federal regulators. The US Department of Justice and the US Federal Communications Commission last year derailed Comcast's bid for Time Warner Cable because of concerns that the merged company would become an Internet gatekeeper that would decide the programming millions of people could see.

Still, the government doesn't usually sue to block vertical mergers such as AT&T-Time Warner, instead imposing restrictions on the combined company's behavior.

But consumer advocates said with media markets so concentrated, the government needs to reconsider this fix.

The Consumer Federation of America's Cooper said that through mergers, the digital communications universe is now dominated by four companies: AT&T, Verizon, Comcast and Charter Communications. The companies have a combined share of 60 percent or more in the video, broadband Internet, wireless and business data service markets, creating a "tight oligopoly on steroids," he said.

*Updated on December 7, 2016 at 19:57 GMT: Changes sentence to indicate Senate hearing took place.

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