AT&T is set to acquire Time Warner in a merger and a deal valued at $85.4 billion!
This will transform the telecom and internet giant into one of the largest media companies in the world. Time Warner owns Warner Bros. film and television studios as well as HBO, TNT, and 24-hour cable news provider, CNN.
“It will disrupt the traditional entertainment model and push the boundaries on mobile content availability for the benefit of customers,” both companies said in a statement.
But will it truly serve the public interest, or will it just lead to companies getting bigger and allowing them to dominate more markets and create more profits?
“Allowing a communications behemoth like AT&T to swallow the Time Warner media empire should be unthinkable. The sorry history of mega mergers shows they run roughshod over the public interest. Further entrenching monopoly harms innovation and drives up prices for consumers. The answer is clear: regulators must say no” said Michael Copps, a former FCC Commissioner and Common Cause Special Adviser.
John Bergmayer, a telecommunications expert at the advocacy group Public Knowledge sees only two things happening: “Either it’s going to give its distribution networks an advantage, or it hopes to give its content an advantage,” he says. But what about pricing?
“I don’t see anything about this merger that would lower costs for consumers or increase choices for consumers,” says director of the Media and Democracy Project at Common Cause, Todd O’Boyle.
Bergmayer also sees another problem with this mega-merger, "not only because of its anti-competitive potential but also out of concerns that the merged company would have greater ability to collect data about consumers and erode their privacy," he points out.
AT&T Chief Executive Randall Stephenson is emphasizing that they can drive better media content to wireless devices. “Premium content always wins. It has been true on the big screen, the TV screen and now it’s proving true on the mobile screen,” he said in a statement.
Is better quality content on mobile devices good for consumers, even at the expense of disadvantaged competition? Only time will tell if the deal pushes through.