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Tuesday, October 27, 2020

Columns

Beware of AT&T, Time Warner Inc. megadeal


The Federal Communications Commission levied the largest civil penalty ever on a cable company, Comcast, no less than a month ago for their “negative option billing” practices.

Comcast blamed the negative option billing on “consumer confusion” in their statement regarding the ruling despite shady pricing practices typical in the oligopoly that is the telecommunications industry. Even with the magnitude of this historic ruling, however, there is an impending, massive deal resting upon the court’s decision: the merger of AT&T and Time Warner Inc.

Time Warner Cable, which was spun off from Time Warner Inc. in 2009, was also the target of a controversial merger with Comcast in 2014. Comcast, however, decided to back out after receiving pushback from regulators, lawmakers and consumer advocates.

The potential of a Comcast-TWC merger and other concerns of competition were cited as reasons to start the merger between AT&T and DirecTV in AT&T’s executive public interest to the FCC. Now, the company would like to push even further.

Time Warner Inc. owns HBO, CNN and Warner Bros. AT&T owns DirecTV along with their cellular and broadband offerings.

How do they justify an even larger merger now? AT&T proclaims that the merger will provide “complementary strengths to lead the next wave of innovation in converging media and communications industry.”

AT&T’s statement also touches upon advancement in “new advertising options.” This is the only possible benefit that I see from the merger because it could find a happy middle ground for advertisers while reaching consumers with more specificity and less regularity.

There is already a frightening concentration of power within the telecommunications market, which deals with the dissemination of information to the masses and the infrastructure of how people communicate.

Verizon and AT&T are the second and thirdlargest telecommunications companies in the entire world. Time Warner is one of the top-10 largest companies in the entire world, leaving little room for competition among competing firms.

AT&T provided kickbacks for NAACP and GLAAD when the company needed support for their attempted acquisition of T-Mobile in 2011. However, Bill Leahy, president of AT&T Georgia and Southeast Region, is on the Corporate (“Private Enterprise”) Board of the American Legislative Exchange Council, which routinely advocates policies that NAACP and GLAAD opposed.

When AT&T needs a deal to go through, it’ll play conservatives against liberals and vice versa; check your partisan alliance at the door. AT&T has also fought against net neutrality, hinting that an anti-competitive environment is in their interests.

To put the cherry on top of a foreboding sundae, the “enhanced customer experience” that AT&T touts could just mean a further sellout of your information to the National Surveillance Agency. The New York Times reported a little over a year ago that AT&T assisted the agency to surveil Americans’ Internet on a “vast scale.”

AT&T will gain more power with this new megadeal. This is a scary thought in a world that is supposed to provide options and not just one forced choice with a company unafraid of competition setting the price.

Opinion columnist Nicholas Bell is an MBA graduate student and can be reached at [email protected]

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