Light Reading

Opposition Mounts to Comcast/Time Warner, AT&T/DirecTV Mergers

Mari Silbey
7/11/2014
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As the FCC sets the stage for public comment and review, opponents to the Comcast/Time Warner and AT&T/DirecTV mergers are raising concerns that the combined companies would exert too much influence over their industries.

The companies are aiming for an air of inevitability, but opponents continue to weigh in with arguments against industry consolidation. Most recently, the Los Angeles Times reported that Dish Chairman Charlie Ergen has specifically asked the FCC to block Comcast's proposed acquisition of Time Warner Cable. Citing concerns about both Comcast's growing leverage with content companies and its control over the Internet market, Ergen said, "There do not appear to be any conditions that would remedy the harms that would result from the merger."

Sen. Al Franken (D-MN) voiced new opposition this week to AT&T's plan to acquire DirecTV. In a letter to the FCC and the Department of Justice, he articulated fears that the acquisition would grant "power that AT&T power potentially could use to obtain an unfair advantage over consumers and competitors."

He is particularly worried that AT&T will push consumers into taking bundled services without a strong standalone broadband offering. Though AT&T has volunteered to maintain a standalone broadband plan for three years if the merger is approved, Franken wrote that "AT&T did not adequately advertise its standalone plan after making a similar promise as a condition of its acquisition of BellSouth in 2006."

Franken also expressed serious concerns about AT&T's commitment to network neutrality, especially with regard to mobile broadband services. He warned regulators that AT&T could become a "gatekeeper of the mobile Internet," and he asked that they "weigh this concern heavily" in their review.

The review process for two major industry mergers continues to chug along. This week, the FCC announced the members of the review committees for the proposed mergers. Now the FCC has opened up the public comment cycle on the Comcast/TWC deal, setting a time table for debate that leads into the fall. All comments and petitions must be filed with the FCC no later than Aug. 25. Responses must then be delivered by Sept. 23, with replies to responses due by Oct. 8.

Both Comcast and AT&T hope their proposed acquisitions will be approved this year. (See AT&T to Acquire DirecTV for $48.5B and Comcast to Send Subs to Charter if TWC Deal Closes.)

— Mari Silbey, special to Light Reading

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DanJones
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DanJones,
User Rank: Blogger
8/25/2014 | 5:17:08 PM
Re: These mergers seriously test the definitions of monopolies and anti-trust regulations...
The new mayor of NYC has weighed in  about the merger with a letter to the FCC, suggesting it may be against low-income residents' interests.

 

Via Gothamist
Phil_Britt
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Phil_Britt,
User Rank: Light Sabre
7/14/2014 | 1:47:17 PM
Re: These mergers seriously test the definitions of monopolies and anti-trust regulations...
Brookseven,

 

Agreed, but the fewer companies, the less the competition, and the consumer loses out. 
brookseven
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brookseven,
User Rank: Light Sabre
7/14/2014 | 1:39:04 PM
Re: These mergers seriously test the definitions of monopolies and anti-trust regulations...
@Phil_Brit,

Profit for shareholders is the entire point of a corporation.  Management teams should be fired if they do anything else.  That is the entire point of a corporation.

seven
VictorRBlake
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VictorRBlake,
User Rank: Moderator
7/14/2014 | 1:15:48 PM
Definitions of terms
I don't understand how anyone could consider iether of these two mergers to be monopolies. Both companies have, in every location at least two and something three other competitors.

Any discussion of "monopoly" simply reveals that the commentor does not understand what a monopoly is. In fact, if we look back at history cable companies are the antithesis of monopoly. They were the "alternative" to broadcast - providing consumers with a second choice. When it came to high speed data, again they were the "alternative" to DSL, giving consumers again a choice. And finally, the same for voice, where cable voice products and wireless are both two alternative choices.

One the video side, most consumers have at least two choices (Direct or Dish, telco, and cable operator). Some obviusly have four or more choices. Whether its two, three, four, or five choices -- none of these is a monopoly.

If the argument is based on the size of the company, that' pretty foolish because all of these companies are "tiny" by comparision to Google and others regarding market capitilization.
Phil_Britt
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Phil_Britt,
User Rank: Light Sabre
7/14/2014 | 1:01:15 PM
Re: These mergers seriously test the definitions of monopolies and anti-trust regulations...
KBode,

I agree. In all industries, one of the big benefits the merger partners tout is "economies of scale." Translation: Layoffs and more profit trickling up to the top.
KBode
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KBode,
User Rank: Light Sabre
7/14/2014 | 12:30:52 PM
Re: These mergers seriously test the definitions of monopolies and anti-trust regulations...
You would at some point think we'd become wise to the artificial promises made in the effort to consolidate every industry? You'd think the obvious negative historical evidence of the problems with rampant consolidation would speak for itself...yet here we are again, being promised by Sprint, AT&T and Comcast that eliminating competitors and creating larger giants will bring immeasurable benefits to all.
Phil_Britt
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Phil_Britt,
User Rank: Light Sabre
7/14/2014 | 11:14:42 AM
Re: These mergers seriously test the definitions of monopolies and anti-trust regulations...
I agree it tests the definitions of monopolies,but that's what you're seeing in several industries. Look what's happened to the airlines, the banks (a trend that hasn't ended), and just about any other industry you can think of. It doesn't make it right; personally I think many of these other mergers should have been stopped. 
DHagar
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DHagar,
User Rank: Light Sabre
7/11/2014 | 4:41:42 PM
Re: Opposition Mounts to Comcast/Time Watner, AT&T/DirecTV Mergers
@mhhf1ve, very true.  The new models change the configurations of the markets, resulting in over night dominance with the new structures.  The new models are truly ecosystems, and the independent players (i.e., small players) can't compare services.

It looks like they will have to establish new descriptions and measures of market control in order to preserve consumer protections.

I think the Comcast/Time Warner is so big, with obvious market dominance, that it has crossed the line and brought about awareness of the potential risks.  Any bets as to whether it is approved?
mhhf1ve
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mhhf1ve,
User Rank: Light Sabre
7/11/2014 | 4:23:36 PM
These mergers seriously test the definitions of monopolies and anti-trust regulations...
Economic market power used to be easier to measure, but as it gets more complex with companies providing services that don't quite overlap but may "look like a duck" to the Supreme Court and others... these merger deals are harder and harder to evaluate in terms of predicting their economic effects and reducing competition in the overall economy.

Too big to fail may soon apply to nearly every industry....
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