Justice Department Alleges AT&T, Comcast Will Together Withhold Content From Digital Rivals

As the US government gets set to fight AT&T's proposed acquisition of Time Warner in a DC federal court, the Department of Justice March 9 submitted a trial brief that sharpens its theories on why the $85 billion merger deserves to be blocked. Justice Department officials say the outcome of the case "will chart the course for the future of video-content delivery in the United States" and are also ridiculing the other side's response. Claiming that the merging parties would "have the incentive and ability to substantially lessen competition by withholding or raising the price for" content is one thing, but what does the government specifically think will happen should the merger pass the judge's scrutiny? 

First, the government will attempt to prove that cable and satellite customers can expect their monthly bills to rise. The government is also suggesting that the merger would harm competition by constraining AT&T's rivals from effectively using HBO as a competitive tool. Perhaps most controversially, the government contends that with two vertically integrated conglomerates in the media space — AT&T/Time Warner and Comcast/NBCUniversal — there could be "coordination" between the two to disadvantage emerging virtual rivals. Dish Sling and PlayStation Vue are singled out as posing a particular threat to AT&T's DirecTV and U-verse services.