Business

AT&T’s deal for Time Warner faces concerns over consumer impact

A trader walks by the post that handles Time Warner on the floor of the New York Stock Exchange, Monday, Oct. 24, 2016. AT&T’s $85.4 billion purchase of Time Warner represents a new bet on synergy between companies that distribute information and entertainment to consumers and those that produce it.
A trader walks by the post that handles Time Warner on the floor of the New York Stock Exchange, Monday, Oct. 24, 2016. AT&T’s $85.4 billion purchase of Time Warner represents a new bet on synergy between companies that distribute information and entertainment to consumers and those that produce it. AP

More than three decades ago, such was AT&T’s monopoly over the nation’s communications networks that the government forcefully shattered its empire.

Now, as one of its successors again seeks a formidable business empire by buying Time Warner, lawmakers, analysts and advocacy groups are closely watching to see if the union poses harm to consumers.

Reaction to AT&T’s $85.4 billion purchase was swift – and, outside of Wall Street, full of skepticism. Much of the concern was rooted in how consumers have fared since Comcast bought NBCUniversal, a deal that provided a template for the consolidation of media and telecommunications.

Acquisitions in general raise warning signs for regulators because of a reduction in competition. But combining a telecommunications company with a media company, in particular, raises questions about whether consumers would have less choice because the conglomerate both creates its own content and provides the pipes that deliver both its own offerings and its competitors’.

“Rarely is bigger better,” Jonathan Schwantes, a senior policy lawyer at Consumers Union, the policy arm of Consumer Reports, said. “For us, it’s all about consumers having choices, good choices.”

Politicians of all stripes have also weighed in with doubts about the prospect of more consolidation. In a statement, the top Republican and Democrat on the Senate Judiciary Committee’s antitrust subcommittee said they planned to hold a hearing on the deal.

And even competitors like Disney quickly chimed in, urging regulators to pay close attention in their review.

At issue is whether AT&T, with more than 100 million subscribers across its wireless, broadband and DirecTV offerings, will somehow favor its own customers when it comes to HBO, CNN and Warner Bros. properties like the Batman and Harry Potter franchises.

Some consumer rights advocates also questioned how AT&T will use the viewership data that it gathers from its subscribers, particularly if the Time Warner acquisition drives more consumers to AT&T’s services.

In an interview Sunday, the chief executives of both AT&T and Time Warner stressed that they had no intention of limiting Time Warner’s content solely to the combined company’s offerings.

“We’re buying what I think is the premium content creator, developer and aggregator on the planet,” said Randall L. Stephenson, AT&T’s chief executive. “To buy that and then constrict how that content is distributed doesn’t make a lot of sense to me. It’s almost illogical.”

AMX-2016-10-23T21:41:00-04:00

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