AT&T and Time Warner: lower prices not part of the bargain

AT&T executives say their purchase of Time Warner should yield a lot of “positives” for customers, including more content, better wireless access to programming and an attractive alternative to cable. But what the deal most likely won’t bring about is a cheaper price for television — and it just may increase the price for in-home internet, according to experts who track the media industry.

AT&T wants to marry its internet and wireless operations with Time Warner’s media businesses, which include HBO, CNN, Turner Broadcasting System and movie studio Warner Bros. AT&T said that the deal would provide “significant financial benefits,” including revenue and earnings growth, lower capital costs and savings of $1 billion within the first three years. Nowhere in the announcement did AT&T specifically mention how the proposed transaction could lower costs for consumers. The reason executives don’t argue that mergers will result in lower prices is because it doesn’t happen, said Matt Wood, policy director at Free Press. In fact, prices may very well go up.