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

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