Two key assumptions in the DOJ challenge to AT&T and Time Warner

AT&T and Time Warner want to merge. What interests me are two key assumptions underlying the Department of Justice’s case that are at odds with other Trump Administration policy or pronouncements. The first is network neutrality. The Trump Federal Communications Commission wants to do away with it — perhaps today. But if net neutrality was in place, then the DOJ concern that the integrated firm will use its power to harm other content providers and damage growing Internet competition would be significantly mitigated. In other words, that concern rests entirely on the FCC getting rid of net neutrality! That suggests the obvious question: why not just keep net neutrality if you are worried about these things? To be sure, the merger makes it worse but the concerns arise in any case due to existing market power. The second assumption regards the value of the Turner cable content. One such, ‘must carry’ channel is CNN. It is on basic cable everywhere (pretty much worldwide). It is hard to imagine that you can compete as a cable operator without it. What? Are you only going to offer MSNBC? Even Fox News is often a more premium offering. The DOJ statement is notable for how it uses AT&T’s words, in particular, against them — quoting their own statements with regard to the previously failed Comcast merger with Time Warner. But the Trump Administration has words of its own. You really have to coordinate fully in order to bring cases like this.