In a response to earlier media mergers such as Comcast-NBCUniversal, and in an effort to adapt to a world in which consumers increasingly turn away from rather than toward the TV to access video content, AT&T this weekend announced a merger agreement with Time Warner (not Time Warner Cable, a long-separate company but one also engaged in a merger, with Charter Communications).
The $86 billion cash/stock combine, plus debt, would make AT&T-Time Warner the largest media company. Infrastructure and pay television firms across the board are moving into studios and film libraries, and vice versa, bringing content and the platforms across which to deliver it together.
Some criticize the value of the dealmaking surge, but a trend is underway. As Yahoo Business News put it:
“Media content companies are having an increasingly difficult time as standalone entities, creating an opportunity for telecom, satellite and cable providers to make acquisitions, analysts say.
Media firms face pressure to access distribution as more younger viewers cut their cable cords and watch their favorite shows on mobile devices. Distribution companies, meanwhile, see acquiring content as a way to diversify revenue.”
Antitrust authorities at the Justice Department, the Federal Trade Commission, and overseers at the Federal Communications commission have yet to comment on the mega-deal. It would be helpful if they abstain. After all, the fact that divisions between content and infrastructure are arbitrary was one of the major reasons many argued against the Federal Communications Commission’s net neutrality regulations nearly a decade ago.
But policymakers and presidential candidates quickly pounced on the deal.
Left of center groups are often suspicious of consolidation, but so are conservative United States senators and even presidential candidates.
Senators Mike Lee (R-UT) and Amy Klobuchar (D-MN), respectively chair and ranking member of the Senate Judiciary Subcommittee on Antitrust, issued a terse joint statement on Sunday, October 23 declaring that “An acquisition of Time Warner by AT&T would potentially raise significant antitrust issues, which the subcommittee would carefully examine.”
Democratic presidential candidate Hillary Clinton didn’t respond directly, but has vowed to “take on abuses of market power,” sharing the views of a April 16, 2016 Barack Obama executive order calling for invigorated antitrust enforcement (“Steps to Increase Competition and Better Inform Consumers and Workers to Support Continued Growth of the American Economy”). Clinton’s running mate, Democratic vice presidential candidate Tim Kaine, remarked directly on the AT&T-Time Warner deal, however: “Less concentration .. is generally helpful, especially in the media.” Meanwhile, the Democratic Platform promises to “make competition policy and antitrust stronger and more responsive.”
Interestingly the most strongly worded response was that of Republican Presidential candidate Donald Trump, who over the weekend in Gettysburg, Pennsylvania promised to torpedo the deal.
“AT&T is buying Time Warner, a deal that we will not approve in my administration…because it is too much concentration of power in the hands of too few…We will look at breaking that deal up and other deals like it.”
There are jurisdictional questions as far as that goes, but in any event Trump also challenged the earlier Comcast-NBC Universal merger along with Jeff Bezo’s purchase of the Washington Post, claiming “Deals like this destroyed democracy.”
It does happen to be the case that media bias is a thing; over 90 percent of Washington, D.C. journalists vote Democratic.
Still, only government action, not the existence of big media outlets and potential new ones like AT&T-Time Warner, can obstruct citizen’s access to information — especially once the Internet was unleashed 20 years ago.
Indeed, centralized governmental restriction of media ownership–effectively limiting the size of microphones—is contrary to the very concept of democracy. An entity unleashing sweeping, cross-sectoral power to control of the size, structure and trajectories of private media outlets is itself the monopoly, if concentration of power is really the concern of those who’ve commented on AT&T-Time Warner.
Most recent mergers are about television and online/streaming entertainment. But core ideas and debate can never truly be bottled up by “big media” in a free society, where government does not practice censorship. However, individuals do have plenty to fear from a government that believes it acceptable for politicians and bureaucrats to block or control media voices. Larger microphones create and spawn rivalry, and are themselves an exercise or implementation of free speech itself, not its enemy. Big media also activates social media responses, making broadcasters and “big media” voices out of all of us.
The reality is the media world won’t freeze after an AT&T Time Warner merger. But “conditions” like those imposed on Charter-TWC and as we are likely to see on AT&T-Time Warner if it isn’t denied altogether are increasingly a problem. They create distortions and safe-zones for competitors rather than protect competition.
The proper response is for competitors, not government, to react to the merger and the communications marketplace as a whole. There’s always something new. At the very moment this merger is drawing attention, the brand-new Amazon Fire TV Stick and Alexa Voice Remote streaming media offering is the number-one electronics seller on Amazon. While people may not want their MTV anymore, they want and get their content and news, no matter what. One innovation after another continues to shake things up and increase competition and possibilities rather than decrease our options.
Originally posted to Forbes.