AT&T’s Flawed Arbitration Proposal

[Commentary] Recently, US District Judge Richard Leon raised the question of whether an arbitration condition would be enough to address the potential harms from the AT&T-Time Warner merger. This proposal would create a mechanism where both sides in a fee dispute concerning Time Warner programming would present a rate to a third-party arbitrator, who would pick the one that was more reasonable. AT&T-Time Warner would not be permitted to take channels off the air and cut the distributor off from its content during the arbitration process. Could such a remedy protect the video marketplace from AT&T’s increased leverage and its ability to use its valuable programming to hold back competition? Unfortunately, AT&T’s proposed remedy is deficient in a number of ways, many of which seem impossible to correct. 

[Gene Kimmelman is the president and CEO of Public Knowledge. Steve Salop is a Professor of Economics & Law at Georgetown University Law Center]