The Court's Decision to Let AT&T And Time Warner Merge is Ridiculously Bad

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To spare you the pain of reading the 170-page opinion [of AT&T/Time Waner] yourself, I went through and pulled out some highlights.  You will note again and again that Judge Leon goes into incredible detail about the businesses of the past, like how the deal might affect cable TV negotiations, while naively glossing over the details of how media works in the present and future. (Buying Time Warner will allow AT&T to… put together clips of CNN to show on phones? Very innovative.) You will also note that the government put on what seems like a very, very weak case. Here’s my condensed summary:

First, Judge Leon says Netflix and Hulu and Google and Facebook are major competitors to AT&T and Time Warner, but both the government and the judge fail to note that all of them depend heavily on open access to AT&T’s network to reach consumers. Then the government’s own expert witness bafflingly cuts down his side’s arguments repeatedly, claiming the merger will save AT&T customers hundreds of millions of dollars. The government does not argue that AT&T preloading its own services and content onto phone and prioritizing their traffic outside of data caps will create an unfair advantage over Netflix. In fact, Netflix is never substantively mentioned again after the introductory section. The judge does not understand that HBO Now and Netflix are both accessed by consumers in the exact same ways. Judge Leon quotes Randall Stephenson calling this a “vision deal.” Twice.
AT&T points out — correctly! — that it wants to see more people use more data generally, so it’s fine with other video services. But the government never makes the argument that AT&T will use its network to prioritize Time Warner content and services over competitors. The judge doesn’t figure this out. So the government loses.


The Court's Decision to Let AT&T And Time Warner Merge is Ridiculously Bad