Uncle Sam Should Put Consumers First in Its AT&T Appeal

Antitrust officials from the U.S. Justice Department say the judge that ruled in favor of AT&T Inc.’s takeover of Time Warner ignored economic theory and common sense. But what the judge needed from them was something more concrete. 

On Monday, the government’s attorneys filed their opening brief to appeal U.S District Judge Richard Leon’s June decision, a last-ditch attempt to stop—or, rather, now undo—the $102 billion transaction that has transformed AT&T into a powerful media conglomerate and inspired other corporate giants to test the bounds of antitrust law. 1  While the odds of overturning the ruling are widely considered slim, it’s interesting, if not disappointing, to see where Assistant Attorney General Makan Delrahim is taking the case.

Market Power

AT&T acquired DirecTV to become a national provider of satellite-TV service, and through Time Warner it gains some of the most popular content that travels through its pipes

Source: Bloomberg Intelligence

Recommended For You

Done-for-You Commission Machines

Accelerate Directly to the Money With These Done-For-You Commission Machines...

Elevate

Your ALL-IN-ONE Solution For Traffic, Leads AND Maximizing Conversions

Snapchat Free Traffic Video Blueprint 2.0 -- Lite (PLR)

Snapchat Massive Traffic Firesale 2.0 consists of 53-module of step-by-step tutorials on providing your audience how to get massive traffic, make cash on demand, and get viral traffic from social networking sites.

Rather than present stronger evidence, his team is arguing that the court erroneously disregarded the economics around bargaining power and failed to fully grasp an expert witness’s analytical model that was core to the case, thus arriving at the decision based on “faulty logic.” I’m no lawyer, but I’m not sure this is the most promising tack.

The common thread in the judge’s opinion seemed to be that the government wasn’t specific enough in tracing the harm the deal would cause consumers and instead relied too much on speculation from AT&T’s competitors. Recall the cross-examination of the government’s first witness, an executive from Cox Communications (an AT&T rival and Time Warner distributor) who was lambasted by AT&T’s lawyer for not doing her “homework” before giving testimony. The judge zeroed in on that back-and-forth in his opinion.

It’s a complicated case because it’s unprecedented in many ways and does require some educated guessing about the future. At the onset of the trial, Leon said “I guess I have to get a crystal ball,” a comment that in and of itself didn't bode well for the government’s attorneys. After all, the media landscape is undergoing rapid change; the pay-TV market went through its round of consolidation, leading the TV-network and film-studio operators to pursue their own megamergers, as they all grapple with cord-cutting and the rising popularity of low-margin streaming services. The truth is, nobody knows what the industry will look like in five or 10 years. 

Even so, the power AT&T now wields by owning HBO, the Turner family of TV networks and the Warner Bros. film studio, alongside its own DirecTV satellite business, DirecTV Now streaming app and AT&T wireless service should be questioned. The antitrust officials make this important point in their opening brief that I would have liked to see them drive home better in the course of the trial: 

The predictable result of the merger, therefore, is to impede the growth of innovative forms of distribution and slow the subscriber loss being experienced by DirecTV.

Recommended For You

Affiliate Hijacker Pro - Wp Plugin

THE FASTEST MOST EFFECTIVE WAY TO GET HIGHLY TARGETED PROSPECTS WHO ARE ITCHING TO FILL OUT YOUR CPA OFFERS!

GraphPlayer Business 25k/m

The Most Powerful and Flexible Video Player and Marketing Platform Which Can Play Facebook Videos On Your Own Website, Blog, and eCommerce Store.

Any shareholder of AT&T can tell you that this is what they’re counting on—a way to stem the subscriber losses at DirecTV and make DirecTV Now a more must-have and profitable service. It’s why AT&T’s shares would have sold off to no small degree had the judge ruled against the merger. AT&T can cast the deal as a way to better cater to consumers by bundling various services, but it’s also a way to slow the tide of change and protect a dwindling business.

Streaming Shift

Signups for AT&T's lower-margin DirecTV Now streaming service offset another drop in satellite-TV subscribers during the latest quarter:

Source: Bloomberg

Note: AT&T began breaking out DirecTV Now's figures for the final quarter of 2016.

It may take time, but one way or another consumers will feel the ramifications of this megadeal and the others it sets in motion. The government let the consumer down, and its opening brief doesn’t instill much faith that it can recover from the June defeat.

Recommended For You

Viking PLR Membership 2017 EM

Viking PLR is an awesome collection of internet marketing related PLR packages each including a free report, an ebook, and a video course. These packages come with full private label rights and can be rebranded if you so choose. 🙂

1 Site Excitrrr Extended

The Very Best Drag And Drop HTML Page Builder Available - Check It Out Today -

  1. The final value of the deal was $102 billion including Time Warner's debt,according to an AT&T filing.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Tara Lachapelle at tlachapelle@bloomberg.net

To contact the editor responsible for this story:
Beth Williams at bewilliams@bloomberg.net

Original Article : HERE ; This post was curated & posted using : RealSpecific

Thank you for taking the time to read our article.

If you enjoyed our content, we'd really appreciate some "love" with a share or two.

And ... Don't forget to have fun!

Recommended Products

AffilEcom Engine - Single Site License

AffilEcom Engine is a WordPress Plugin + Theme Combo That Turns Any Site Into Money-Making Asset With the Help Of Amazon, AliExpress and eBay platforms.

Swift Member 2.0 - Awesome Members Club

Get Unlimited Upgrades and Updates With New Plugins Added, InfoProducts and Video Course Across Multiple Niches With Lifetime Support For Bugs and Issues

Leave a Reply