FCC Alum: Block the "Unthinkable" AT&T-Time Warner Merger (Guest Column)
Combining content and distribution is anti-competitive and a "terrible idea," writes a former commissioner.
Corporations are not people, the Supreme Court's insistence otherwise notwithstanding. But they have some things in common. AT&T, for example, is displaying the very human tendency to cling to old habits — particularly bad habits.
Decades after it was broken into pieces by a federal court, the former Ma Bell again is gobbling up competitors and working hard to re-establish itself as the nation's communications behemoth. It spent the past decade snatching up cellular carriers and a year ago acquired satellite provider DirecTV, entrenching it as the nation's largest pay TV and second-largest mobile company, respectively. Now AT&T has struck an $85 billion deal to add Time Warner to its holdings. The merger would make AT&T a communications producer as well as a carrier, giving it control of HBO, TBS and CNN, along with the entire Warner Bros. library.
Why would AT&T think it can get away with such an anti-competitive move? Because of the years of kid-gloves treatment it has received from pliant legislators and regulators who never met a merger they didn't love. The results have been awful for consumers, who typically have one or at most two choices for wired broadband. As a result, Americans are internet laggards, ranking 17th globally for wired-broadband penetration.
Combining content and distribution — medium and message — is a terrible idea. Postmerger, AT&T would have every incentive to withhold Time Warner's marquee content from rival online video distributors like Netflix and Amazon, which have been so vital to the creative renaissance in entertainment. And this merger's harm would extend beyond the creative community. It would add oodles of debt to AT&T's balance sheet, to be repaid by consumers through higher prices.
Every bit as concerning is what the merger could mean for our civic dialogue. A healthy democracy requires a diverse flow of news and information. If the merger were approved, could viewers count on CNN to report fairly on AT&T or its rivals? Some of America's most trenchant political satire appears on TBS' Full Frontal With Samantha Bee and HBO's Last Week Tonight With John Oliver. Would these shows risk poking fun at their owner's shoddy cellular service or ever-rising DirecTV bills?
This merger should be unthinkable. Fortunately, the FCC can reject communications mergers it judges antithetical to the public interest. Congress empowered the agency to award licenses to the public airwaves and to oversee the transfer of those licenses. This proposed combination ought to be an open-and-shut case, but AT&T may try to skirt the law and avoid FCC scrutiny by not purchasing Time Warner's broadcast and satellite licenses. Policymakers in Washington shouldn't let the company get away with it.
More than 80 years ago, Congress created the FCC to uphold the public interest in independent, diverse, accessible and affordable communications. This merger would shift the markets for cellular, pay TV, broadband and programming. If ever there were a combination that impacted the public interest, it's this one. Fortunately, citizens are making their voices heard. In recent years, they have fought for open internet ("net neutrality") rules to protect them from online gatekeeping — thanks, in part, to a searing Oliver segment that galvanized action. They spoke out to stop Comcast's takeover of Time Warner Cable, and they're speaking out on this merger proposal.
There are encouraging signs that Washington is listening. Sens. Mike Lee (R-Utah) and Amy Klobuchar (D-Minn.) have scheduled a congressional hearing on the deal for December. If AT&T considers skirting public interest scrutiny, our policymakers should move swiftly to hold the company accountable. It's time to break Ma Bell's old habit.
Michael Copps was an FCC commissioner from 2001 to 2011 and now leads the media and democracy reform initiative at Common Cause.
This story first appeared in the Nov. 11 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.