The WGA East and West applauded the Justice Department today for moving to block the proposed merger of AT&T and Time Warner, saying such a deal would be bad for content creators as well as consumers.
The union, which represents writers of motion pictures, television, radio and Internet programming, said the proposed combination of must-have content with vast control over distribution would give the company enough power to undermine competition, raise prices and restrict access to programming.
“This merger would result in a media behemoth even larger than the failed Comcast-Time Warner Cable venture, and should be stopped,” the WGA West said in a statement. “With reports surfacing each week of other possible media mergers, blocking this deal has only become more critical.”
The WGA East also expressed concern about the danger of media consolidation.
“The proposed merger would continue that dangerous trend, offering storytellers fewer opportunities to create and distribute content that informs and enlightens viewers,” said the WGA East. “It would leave the media industry with even fewer gatekeepers – a narrower range of people deciding what people watch. This is not good for audiences and it’s not good for democracy.”
Consumer advocates voiced similar concerns. Consumers Union similarly cheered the the DOJ’s decision, citing the merger’s potential to hurt competition, limit consumer choice and drive up costs.
“Combining AT&T and Time Warner would create a massive telecommunications and media company with its fingers in almost every pot of these increasingly connected industries,” said Jonathan Schwantes, senior policy counsel for Consumers Union. “A merger of this sort and magnitude — combining one of the largest wireless and video providers with one of the largest content producers — could create unprecedented opportunities for AT&T to maximize the value of Time Warner’s premium content in ways that could drive up consumer costs and stifle competition and consumer choice.”
Tim Wu, author of The Attention Merchants: The Epic Struggle to Get Inside Our Heads and a professor at Columbia Law School, cited a 10-year exclusive deal with Taylor Swift as an example of how AT&T potentially could wield its control over coveted content to hurt competitors.
The wireless carrier’s multi-year agreement with the Grammy winner provided exclusive videos and concert footage for subscribers, a move that gave it an edge over smaller rivals like T-Mobile, Wu observed. With its acquisition of Time Warner, AT&T would lay its hands on a lot more coveted content — from HBO’s Game of Thrones to the Batman film franchise.
“Though restricting HBO to just AT&T customers wouldn’t make financial sense, there are many things that AT&T could do with HBO and other programming to hurt rivals, like raising the prices for it, creating AT&T-exclusive programming and perhaps completely preventing rivals like Dish, DirecTV’s satellite competitor, from buying its programs,” Wu noted in a commentary appearing in The New York Times.