AT&T Should Drop DirecTV, Not CNN

The AT&T/Time Warner marger is dorsum in the news, simply the news hook is a distraction. Co-ordinate to diverse reports, President Trump wants the ii companies to divest themselves of CNN as a condition of the merger, because he hates CNN.

Opinions This is a smokescreen and a sideshow, distracting from the existent trouble with this merger. The Section of Justice should slap some tough conditions on the, and they shouldn't involve divesting CNN. They should involve divesting DirecTV.

For what it'south worth, smart news reports say the DOJ has besides asked well-nigh this, only the headlines got grabbed by the president's CNN grudge.

Bloomberg columnist Joe Nocera, who I respect, says the AT&TW deal should go through because NBC/Comcast went through. Only two wrongs don't make a right, and NBC/Comcast was actually a less threatening deal than ABC/Time Warner.

That'southward because AT&T'southward distribution arm is and then much more than powerful than that of NBC/Comcast. Comcast is the nation'due south biggest cable provider, just AT&T owns a nationwide 4G LTE wireless network; a nationwide satellite TV service, in DirecTV; and a loftier-speed cyberspace service in 21 states.

That means AT&T has far more than power than Comcast does to pull anti-competitive shenanigans. The most obvious is for AT&T to keep its Time Warner entertainment properties on its own channels; holding back HBO from Dish, for example.

Simply it isn't likely to do anything that unsubtle. Rather, you'll become sectional Game of Thrones behind-the-scenes videos only on AT&T phones and DirecTV, or the Cartoon Network app will become abroad and become part of DirecTV Now, so you end up having to have that brand on your domicile screen, and you're more likely to subscribe.

And if new delivery competitors crop up, they'll go squeezed. An independent Time Warner has incentives to brand a deal with every possible streaming service. An AT&T-owned one has incentives to freeze out anyone who competes with DirecTV At present. Maybe, one time once more, they won't freeze them out entirely; possibly they'll just accuse enough more for content that those services take to charge more than DirecTV At present does. That'southward how this works.

Lamentable, That'southward Merely Also Big

"Behavioral" conditions, similar those placed on NBC/Comcast, aren't practiced enough because they expire. NBC/Comcast is about to become unshackled, Bloomberg reported earlier this yr, enabling the company to exert leverage over competing TV distributors and charge them college rates.

At that place'due south an obvious solution here: if AT&T wants Fourth dimension Warner so badly, it needs to drop DirecTV, returning DirecTV to being a competitive content delivery system. That would put AT&TW about on par with NBC/Comcast in terms of power (Comcast has more than cablevision subscribers, but it doesn't have a wireless network.) That'south withal also powerful, but information technology doesn't create a new hideous level of gigantism.

AT&T might not be willing to live with that status. In an interview on CNBC, AT&T CEO Randall Stephenson said the whole signal of this merger was that "Cyberspace companies" (read: Google and Facebook) control online advertisement with such an atomic number 26 grip, that AT&T tin can only compete by combining content and commitment.

But letting things get bad isn't a license to make them worse. Yes, the government immune NBC and Comcast to merge, creating a mini version of the behemoth that AT&Time Warner would become. And yes, Google and Facebook are, right now, worse. The terrifying grip that those two companies have on the entire online media ecosystem is what's causing titans of industry like Stephenson to give vaguely panicked interviews to CNBC.

Just what if the answer there isn't growing AT&T, but breaking Google? Antitrust constabulary seems to take no thought how to deal with the internet giants, only if we don't want our amusement, news, connectivity, and personal data all controlled by a tiny handful of oligarchs, that's the question more people demand to be request.