October 2016

Combining telecommunication giant AT&T with Time Warner and its content assets that stretch from CNN to the Harry Potter film franchise was bound to draw fire from media consolidation foes, and that was the case Oct 23 and 24 as details of the merger deal emerged.

Mike Copps, something of the elder statesman of consolidation critics, called the deal "unthinkable." "The sorry history of mega mergers shows they run roughshod over the public interest," said Copps, now a special advisor to Common Cause and formerly Federal Communications Commission Democratic chairman and commissioner. "Further entrenching monopoly harms innovation and drives up prices for consumers. The answer is clear: regulators must say no."

Gene Kimmelman, who heads up Public Knowledge, said, “[W]e see many competition concerns related to preferencing their own services and content in ways that may harm consumers."

Demand Progress Executive Director David Segal said the deal would be "disastrous' for the public. "This takeover would result in a dangerous concentration of economic and political power that could lead to higher costs, curtail consumer choice, and potentially constrain speech and information access," he said.

The Parents Television Council said: "AT&T’s purchase of Time Warner will create an entertainment behemoth, and no doubt the corporate spin-masters will emphasize benefits to consumers. But if history is our guide, this merger should be of great concern to families."

AT&T’s announced $85.4 billion acquisition of media giant Time Warner signals a ramp-up in consolidation of content assets that many video industry players and analysts predicted would happen. Gaining ownership of HBO and its online outlet, HBO Now, as well as Warner Brothers and Turner -- which has a classic-movies subscription video on demand (SVOD) service waiting in the wings -- gives AT&T a huge chunk of content for its pending linear over-the-top (OTT) service, DirecTV Now.

AT&T's deal for Time Warner is just the latest – but so far the largest -- in a series of maneuvers by larger corporations to scoop up pricey media and entertainment assets with key pieces of online video delivery services and infrastructure. For example, in August Disney carved away BAM Tech from Major League Baseball Advanced Media, buying a 33 percent share. And last year and early into this year, major cloud players including Amazon and IBM bought up numerous delivery providers. On the surface, Time Warner's media assets should allow AT&T to compete directly with linear multichannel video programming distributors (MVPDs) like Sling TV and PlayStation Vue, and give Netflix, Amazon and Hulu a run for their money. “The need to be competitive in this area is becoming paramount, with the likes of Hulu and YouTube preparing linear-channel-based online subscription offerings of their own,” said IHS Technology Director of Research Ted Hall. Analyst Rich Greenfield of BTIG said that AT&T's strategy in buying Time Warner is to get direct access to Warner Bros and HBO's "content engines." But other analysts are somewhat skeptical that owned content will help AT&T long-term.

AT&T may no longer be looking to spend much in the incentive auction of 600 MHz spectrum now that it has agreed to fork over $85 billion to acquire Time Warner. And that would likely mean that the auction won’t raise nearly as much money as had been expected.

The nation’s second-largest mobile network operator announced over the weekend that it has agreed to buy Time Warner in a blockbuster deal to expand its digital media empire. The move comes as AT&T prepares to launch DirecTV Now, a mobile-focused, over-the-top (OTT) offering in an effort to leverage the 2015 $49 billion acquisition of the satellite TV provider. Interestingly, the announcement came just a few days after Stage 2 of the incentive auction of TV broadcasters’ airwaves ended abruptly after a single round, surprising analysts and other onlookers who expected the second stage to last two weeks or more. Stage 2 generated only $21.5 billion in bids, falling far short of the $54.6 billion that would have ended the event. The unexpectedly truncated round led some analysts to suggest that one bidder that had been looking to buy spectrum nationwide may have put its wallet back in its pocket, essentially walking away from the event. And Tim Farrar of TMF Associates took that scenario one step further, suggesting Comcast – which had been expected to spend roughly $5 billion or $6 billion at auction – might have opted out, choosing to focus primarily on the MVNO agreement it activated with Verizon last year rather than investing heavily to acquire its own spectrum licenses.

On Nov 9, either Hillary Clinton or Donald Trump should be the next president of the United States. But whether reporters are able to follow her or him throughout the day, as is done for the sitting president, remains unclear. Neither campaign has yet agreed to a protective pool to track the president-elect’s movements, a departure from recent election cycles.

“It is not normal and it is unacceptable,” said Jeff Mason, a Reuters correspondent and president of the White House Correspondents’ Association. The White House Correspondents’ Association oversees the rotating group of reporters who travel everywhere with the president and file dispatches to the larger press corps on what he’s doing, whom he’s meeting with and when he returns home. This arrangement, known as a protective pool, is considered necessary to ensure journalists are present in the event of any newsworthy comment or moment, including a threat on the president’s life. Both the Clinton and Trump campaigns have traveling press pools, but neither is fully protective. The Democratic and Republican standard-bearers in recent election cycles ― including Sen John McCain (R-AZ) and former Massachusetts Gov Mitt Romney ― had protective pools in place by the time they wrapped up the summer conventions. In letters sent to the Clinton and Trump campaigns, the WHCA’s leadership expressed “profound concern and consternation” at both for so far failing to establish a protective pool system and urged each “to remedy the situation without delay for the remainder of the 2016 campaign.”