The $85 billion merger of AT& and Time Warner was cleared by a federal judge in Washington, D.C., today in a landmark antitrust ruling. U.S. District Court Judge Richard Leon accepted the survival-of-the-fittest argument AT&T and Time Warner executives made in court, paving the way for the tie-up of the the nation’s second-largest telecommunications company and the biggest pay TV provider with one of the country’s leading film and television studios. The companies had argued that the move is essential to compete in the current media landscape.
The Department of Justice had sued to stop the merger, contending that such a merger would place much power in the hands of one corporation. DOJ lawyers today already were hinting that an appeal could be in the works.
The result, if it stands, could pave the way for a wave of M&A action much like ones already in the works in the media biz like Disney-Fox-Comcast and Sinclair-Tribune.
It didn’t take long for opponents and proponents to weigh in on Leon’s ruling (refresh for latest):
“Today’s decision is a blow to consumers, content creators and competition. The WGAW knows too well the harms of vertical mergers and welcomed the DOJ’s efforts to block this one. Unfortunately, a combined AT&T-Time Warner, like so many mergers before it, will lead to higher prices and fewer choices. Further, it will pave the way for more anti-competitive mega-mergers, like the forthcoming Comcast-NBCU-Fox tie-up. This ruling, coupled with the government’s abdication of open Internet protections yesterday, means the future of the Internet and content distribution is in the hands of a few, increasingly consolidated and powerful corporate gatekeepers. The approval of this merger makes clear that Congress must pass legislation that unambiguously protects competition in the face of vertical consolidation.”
“The AT&T/Time Warner merger and the demise of net neutrality are a one-two punch square in the midsection of American consumers and content-creators. Never before has so much programming been under the domination of so few massive media and technology corporations. At a time when the country demands, and needs, the broadest possible set of views and stories and voices, we have handed over the keys to the media kingdom to giants whose sole motivation is to maximize their short-term investment return, not to inform or enlighten or entertain. Monopolies and oligopolies are bad for the economy in general, and for people who care about compelling stories and insightful reporting, in particular.”
Sen, Ed Markey (D-MA), a member of the Commerce, Science and Transportation Committee
“This ruling is an assault on consumers, choice, and innovation,” said Senator Markey. “The telecommunications market needs more competition, not more consolidation. We need a telecommunications market where pay-TV gatekeepers don’t favor their own content providers, but allow minority, diverse, and independent programmers to reach Americans’ screens. I fear this decision will only further fuel merger mania in the telecommunications and other markets.” Today’s decision underscores the need to restore robust net neutrality rules, so broadband providers like AT&T cannot use their gatekeeper role to harm competing services and content. Without net neutrality protections in place, AT&T will be free to block, slowdown, or charge fees to competitors like Netflix and Hulu to favor their own DirecTV Now streaming service and HBO content. Speaker Ryan should schedule an immediate vote on my CRA resolution to restore the FCC’s net neutrality rules.”