The top question on many consumers' minds: What does this merger mean for me? Pros: 1) The promise of new kind of content and 2) Potential competitor to cable. Cons: 1) Potential risk of exclusivity or self-dealing and 2) Consolidation and risk of higher prices.
[Commentary] The good news for AT&T/Time Warner is that antitrust enforcement is not, in practice, as politicized as many people seem to think. In the past, regulators have allowed broadly similar mergers to go forward, albeit with conditions attached that undermine their main business rationale. But one reason antitrust enforcement has not been particularly politicized is that it hasn’t been a major point of political emphasis. That’s been changing rather rapidly in 2016. Here’s a look at some of the hurdles ahead:
Conduct remedies are going out of style
Sen Elizabeth Warren (D-MA) has made antitrust enforcement a priority
The timing of the deal makes this a key test
[Commentary] There’s growing concern on both the right and the left that major media conglomerates are becoming too concentrated. In particular, there’s a high level of resentment against incumbent telecommunications providers, which are seen as charging high prices and offering poor service. That makes opposing the deal good politics.
Luckily for AT&T, antitrust decisions are supposed to be made based on the law rather than on political considerations. AT&T’s fate will rest in the hands of whoever runs the Justice Department’s antitrust division in the next administration. But in making the case for the deal, the company has a big problem: The most compelling business arguments for the deal — that the new megacompany can boost profits by giving Time Warner content favorable treatment on AT&T’s wired and wireless networks — are also the arguments that are most likely to attract skepticism from regulators. Because of that conundrum, AT&T executives have effectively been forced into telling a somewhat self-contradictory story, talking vaguely about synergies the deal will allow while simultaneously insisting they won’t exploit those synergies so much that it could damage competition.
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