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Bow Down To Your Masters: AT&T To Buy TimeWarner For $80 Billion

By Petr Knava | Industry | October 24, 2016 |

By Petr Knava | Industry | October 24, 2016 |

The third largest cable provider in the United States has its eyes on the world’s third largest television networks and filmed TV and entertainment company.

That’s right, iiiiiiiiiiit’s AT&T and TimeWarner iiiiiiiiiiin Hungry Hungry MegaCapitalists! Gobble gobble!

Just how mega, you ask? $85.4bn worth. What could be worth that much money, you enquire? well, HBO, Warner Bros., CNN, DC Comics, Cartoon Network, Turner Broadcasting System, The CW Television Network, and as of August 2016, 10% of Hulu.

AT&T, that supremely beloved monolith, owns vast tracts of cable and broadband through which it feeds millions of Americans their TV and internet needs, but it does not — as of yet — own any means of content production. This merger would change that.

Donald Trump, that bloviating sack of fascist turd gas, has said that he would put an immediate end to the merger if elected President. Which is a good thing to say, buuuuuuut because it’s Donald Trump, we know that he wouldn’t actually do something he’d say he’d do, and he won’t be elected, so we can leave him there to fester in his own irrelevance.

Brian Fallon, spokesperson for Hillary Clinton, said that regulators should be having a close look at the deal, but that there was ‘still a lot of information that needs to come out before any conclusions should be reached.’ Which sounds a lot to me like me saying that I’ll ‘probably be able to make it to your wedding, yeah. Just gotta make sure my calendar’s clear then.’ Spoiler alert: I ain’t making that wedding.

Two high profile political voices were united in voicing their concerns over the merger.

Minnesota Senator Al Franken urged caution and scrutiny:

And Bernie Sanders called for an outright halt:

Interestingly — and not at all indicative of the crafty maneuverings of big business — the deal was apparently meant to be announced after the election, but a leak forced the move:

Aside from the inherently worrisome nature of giant corporations consolidating their empires, a number of consumer groups and commentators have expressed concerns that by seizing control of both content and production, AT&T could provide favourable access to its own content. As per the BBC:

The competition lawyer Amanda Wait from Hunton & Williams in Washington said it was not a straightforward issue.

“The anti-trust division here in the US is going to have to take a hard look at how this deal changes AT&T’s incentives and that’s a really complicated question,” she told BBC radio’s World Business Report.

There are two main issues, she said. Firstly, whether AT&T now has an incentive to withhold Game of Thrones from other cable providers. And secondly, whether AT&T will favour its own content over others that it’s carrying.

“Is AT&T going to have an incentive to make HBO and other Time Warner channels more visible, more easily accessible on [AT&T’s] various service networks and dis-favour, or maybe even hide, the other channels that it’s carrying?” she said.

One mustn’t forget of course that it isn’t so long ago that AT&T — or rather its original form — had grown so gargantuan that it had to be broken up by the US government. One of the companies created by this breakup was Southwestern Bell (SBC), which soon began a series of ravenous acquisitions, including some of the component pieces of the broken-up AT&T. Eventually it gobbled up the original AT&T for a few billion and changed its name from SBC to…AT&T. Ah, the amorphous nature of modern merger capitalism!

Meet the new boss! Same as the old boss!

A similar content creator/service provider merger to AT&T and TimeWarner was Comcast’s 2009 devouring of NBC Universal. According to the NYT:

That has been a longstanding concern about Comcast’s ownership of NBCUniversal, which the Federal Communications Commission approved in early 2011 under several conditions, including ensuring that NBCUniversal’s programming was available to all video service providers and at fair terms; safeguarding the access of Netflix and other online video competitors to Comcast’s network; and protecting local programming.

Some consumer advocates have questioned how effectively regulators have enforced the conditions of the NBCUniversal deal. Still, Mr. Schwantes of Consumers Union said that the programming limitations were the most crucial aspect of the F.C.C.’s ruling and regulators should keep them in mind as they decide whether to allow the Time Warner takeover.

Of special interest is that, unlike Comcast, AT&T is a truly national service provider, as well as an international one, given its growing presence in Mexico and Latin America thanks to previous acquisitions.

A Senate subcommittee responsible for competition is scheduled to hold a hearing in November on the merger.

Both main players have expressed minimal worry that the deal will be blocked.


Petr Knava
lives in London and plays music

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Petr is a staff contributor. You can follow him on Twitter.