by Robert Reich:AT&T's mammoth $85.4 billion deal to acquire Time Warner should be blocked

[elleng]

because it would lead to higher costs, fewer choices, worse service, and further monopolization of communications in America.

But how to block it? The Federal Communications Commission won’t, because Time Warner has only one TV station that it could easily sell off. Which means the Department of Justice has to take responsibility here -- suing in federal court, and convincing a judge that the merger would violate antitrust laws.

The Justice Department should argue that AT&T (which also owns DirecTV) is so large that by buying the giant Time Warner it could: (1) favor Time Warner content over alternative programming, thereby driving more customers to its Time Warner division and enlarging its overall market power still further; (2) make it harder for competitors of DirecTV or to its streaming service to get access to Time Warner programming, thereby driving customers to its own platforms and also gain market power; (3) give preferential treatment to its own programming and services on its broadband networks, thereby handicapping other programming and services; and (4) gain even more data on consumers, enlarging its market power even further.

The question is: Will the Justice Department move on this, and how quickly? What do you think?'

https://www.facebook.com/RBReich/?hc_ref=NEWSFEED&fref=nf

[lapfog_1]

1. As a rule, content creators should not own content delivery systems.

TV, Internet, radio, etc.

In my humble opinion, delivery should be at the very least highly regulated if not a public utility (like water or electric power).

That would include cell phones and wifi and wired internet and cable.

Then AT&T can buy Time/Warner... just like Comcast now owns NBC/Universal... and they compete with Disney/Lucas/Pixar/ABC for creating content.

[elleng]

2. 'And yet over the weekend Mr. Bewkes agreed to sell Time Warner to AT&T

for $85 billion in a deal that, if approved by regulators, will vastly reshape the media and telecommunications world — and ultimately the way Americans will consume and pay for their favorite television shows.

There was a good reason that Mr. Bewkes had been skeptical of big mergers that combined distribution and content: They are complex and hard to make successful, and they invariably face enormous headwinds from regulators, who will undoubtedly tie their hands in an effort to protect consumers from anti-competitive behavior.

“Let’s be honest, prices aren’t going to go down because of this,” said Rich Greenfield, a media analyst at BTIG Research. “I don’t think vertical integration lends itself to consumer benefits.”'>>>

http://www.nytimes.com/2016/10/24/business/making-sense-of-atts-bid-for-time-warner.html?

http://www.democraticunderground.com/111679125

[lapfog_1]

3. The next generation

or rather the current crop of teenage to young adult (under 25) consume almost everything via cell phone. AT&T wants to own content to expand their base of cell phone and internet users. They plan on doing exclusive AT&T / TIme/Warner content creation to accomplish this.

That said, I'm not sure how many under 25 are interested in Time/Warner/TBS/CNN content.

I don't think that the executives have even heard of K-pop or Pewdiepie.

[elleng]

4. Your point about 'vertical integration' is sound,

and reflected in the earlier statement. “Let’s be honest, prices aren’t going to go down because of this,” said Rich Greenfield, a media analyst at BTIG Research. “I don’t think vertical integration lends itself to consumer benefits.”'