It seems kind of obvious that problems with such mergers can come up when net
neutrality is not mandated. Same as always has been, with cable TV companies.
Your local monopoly broadband provider/MVPD can now degrade or block content
that competes against his own, with impunity. Just as they can degrade web
sites they don't like, with impunity. On the other hand, with a guarantee of
telecom neutrality, over AT&T's "advanced telecom service," then no problem.
The funniest part of this is that the judge dismisses just this scenario, like
it doesn't matter to the telecoms. It is truly baffling the level of stupidity
that has become the norm. Quoting:
"Judge Leon said that the DOJ had failed to prove its case that the merger
would increase Turner's bargaining leverage in affiliate negotiations, arguing
that a merged company would not increase the likelihood of 'blackouts' and that
the DOJ's argument that Time Warner content is considered 'must have' to pay-TV
operators."
Maybe THAT point is somewhat debatable, although did this judge never hear of
network blackouts in cable TV systems? If we have a clueless FCC Chairman who
hasn't moved beyond the cable TV model, wanting it to apply also to Internet
service, you'd have to be very slow of wit not to grasp that just maybe, the
same consequences will apply too. Content owner doesn't get in bed with the
service provider, content is blocked. DUH! But the next quote is far more
astounding.
"The evidence showed that distributors have successfully operated, and continue
to operate, without the Turner networks or similar programming," Judge Leon
said. "The evidence indicated that the term 'must have' is a marketing phrase
used by virtually every programmer to suggest its programming is popular with
viewers."
Whaaat?
What freakin' idiot can't understand why we need a guarantee of neutrality in
the US telecoms? This merger is not directly tied to the net neutrality issue,
but the two become tied regardless. This particular judge is saying, hey, if
your local monopoly doesn't carry the content you want, pound sand.
Congress mandated the neutrality of US telecoms, in 1906, just for this reason.
Internet service is a telecom service, not your ho hum who gives a crap cable
TV.
Bert
-----------------------------------------------------
https://www.tvtechnology.com/news/judge-decides-in-favor-of-at-t-tw-warner-merger
Judge Decides in Favor of AT&T/TW Warner Merger
$80B merger expected to move forward swiftly
Tom Butts* 7 hours ago
WASHINGTON--A federal judge on Tuesday gave the green light to proposed
AT&T-Time Warner merger in a case that could change not only the media
landscape but the future of business consolidation across the board.
The decision by U.S. District Judge Richard Leon allows the deal-which was
proposed in October 2016 and is now valued at $80 billion-to proceed and gives
impetus to Comcast to move forward in its attempted disrupted takeover of 21
Century Fox, which is also being courted by Disney in an all-stock deal worth
$52.4 billion.
Judge Leon excoriated the U.S. Dept. of Justice, which had stepped in to oppose
the merger last year on the grounds that it represented a "vertical merger"
between the two companies that would threaten competition. The DOJ claimed that
the merged company-which would combine such popular Time Warner properties as
CNN and TBS with the nation's largest pay-TV distributor-would gain an unfair
advantage in negotiations with multichannel video program distributors and the
fast growing market for "virtual" streaming services such as AT&T's DirecTV
Now, DISH's Sling TV and Google's YouTube TV.
''SMALL WONDER'
AT&T argued that the merger would increase innovation and competition at a time
when the combination of video and the internet has revolutionized the
television industry in ways unseen since its origin. Judge Leon noted that the
case illustrated a commonly held notion both in and outside the Beltway-that
federal regulators are woefully behind the curve when it comes to keeping up
with the impact that technical innovations have on the American consumer market.
"If there ever were an antitrust case where the parties had a dramatically
different assessment of the current state of the relevant market and a
fundamentally different vision of its future development, this is the one,"
Judge Leon wrote. "Small wonder it had to go to trial!"
Judge Leon said that the DOJ had failed to prove its case that the merger would
increase Turner's bargaining leverage in affiliate negotiations, arguing that a
merged company would not increase the likelihood of "blackouts" and that the
DOJ's argument that Time Warner content is considered "must have" to pay-TV
operators.
"The evidence showed that distributors have successfully operated, and continue
to operate, without the Turner networks or similar programming," Judge Leon
said. "The evidence indicated that the term 'must have' is a marketing phrase
used by virtually every programmer to suggest its programming is popular with
viewers."
Despite what many considered a lack of precedence in the ruling, Judge Leon did
cite three previous cases where distributors aligned with programmers and the
result was not what regulators feared: News Corp's partial acquisition of
DirecTV in 2003, which it spun off in 2008; the 2009 split of Time Warner's
programming business with Time Warner Cable, and Comcast's acquisition of NBC
Universal. "Those instances of prior vertical integration did not affect
affiliate fee negotiation or content prices," Judge Leon wrote.
THE REACTIONS
AT&T said it was "pleased that, after conducting a full and fair trial on the
merits, the court has categorically rejected the government's lawsuit to block
our merger with Time Warner. We thank the Court for its thorough and timely
examination of the evidence, and we compliment our colleagues at the Department
of Justice on their dedicated representation of the government."
The merger, which faced a deadline of June 21 before it would result in a $500
million breakup fee is set to go ahead unless DOJ appeals, which it has not
decided on yet. Nevertheless, consumer and cable lobbyists noted their
opposition to the decision.
Common Cause called it a "horse-and-buggy decision blind to today's
communications marketplace. The court's decision blessing of the AT&T/Time
Warner merger creates a communications behemoth that that will raise prices for
consumers, curb innovation, and reduce the amount of independent and diverse
programmers in the video marketplace.
The American Cable Association, an organization of small- to mid-sized cable
operators warned of the negative consequences of the decision. "When a single
firm owns both video distribution and programming assets, a major competitive
harm that arises is that the vertically integrated firm will have both the
incentive and ability to disadvantage rival distributors by raising the prices
it charges these rivals for programming," it said. "This harms consumers
because a share of these price increases are passed through to them."
Gary Arlen, president, of Bethesda, Md.-based Arlen Communications research
firm and contributor to TV Technology echoed Judge Leon's contention that
federal regulations are not keeping up with technical innovation, adding that
it's time to overhaul Congress' Communications Act that was passed more than
two decades ago
"The 1996 update barely mentions the Internet, yet developments during the past
two decades have changed the ways that broadcasters, cable and 'telephone'
companies operate," Arlen said." They all deliver the same Internet Protocol
technologies via both wired and wireless platforms. AT&T/Time Warner functions
in conduit and content realms [formerly two separate categories in
communications policy], just as broadcast networks and their O&O stations do
since the demise of fin/syn rules. In other words, the multiple lines of
business covered by the Act are increasingly indistinguishable and should be
regulated along similar lines: the 'level playing field' and possibly with the
'light touch,' to parrot the politicians' lingo.
"Realistically, any such omnibus overhaul is unlikely in the foreseeable
future, given the financial and lobbying clout of the various sectors who want
to play by their own rules," Arlen continued. "Yet a major reexamination of the
law - no matter how long it takes - would be preferable to all the constant,
minor [and as in the case of net neutrality, major] adjustments that we now
see."
Observers think this decision will encourage more consolidation (and
disruption) in the media market, between vertical markets. "The floodgates will
open," Bank of America Merrill Lynch Analyst Jessica Reif told the Wall Street
Journal.
----------------------------------------------------------------------
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