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A competitive marketplace is the cornerstone of our economy -- consumers rely on it to keep prices down and choices up. When several vendors are vying for a piece of a consumer’s paycheck, they are forced to bring their best offerings or face the consequences. Laws are on the books to foster a competitive market, but they must be enforced, and more changes are needed.
Media and communications consolidation threatens democracy, diversity, and can lead directly to higher prices to consumers. Horizontal deals (for example, cable, wireless, or media companies merging with each other) and vertical deals (for example, a cable company buying a programming network) can each raise concerns. Collusive deals between companies can, as well. Where appropriate, Public Knowledge believes harmful deals should be blocked, or at least remedied with enforceable conditions designed to protect the public interest.
Public Knowledge is working to ensure a fair, affordable, and competitive media marketplace for consumers.
Our work has included the following proposed mergers:
Comcast/NBCU: This vertical deal was approved by the Department of Justice in January 2011, with conditions designed to protect video competition. At the time, as now, Comcast was the largest cable television provider in the United States. Public Knowledge argued that this would allow Comcast to stifle online video competition by favoring NBC content, and by withholding NBC content from competitors.
AT&T/T-Mobile: Public Knowledge opposed the proposed takeover of T-Mobile by AT&T, which would have reduced choices in the national wireless market. The FCC and DOJ agreed with our position and the deal was withdrawn.
Comcast/Time Warner Cable: After significant pushback from the public and members of Congress, as well as the threat of an antitrust lawsuit from the Department of Justice, Comcast abandoned this proposed merger in April 2015. The combined companies would have created a cable behemoth with about 30 millions subscribers and given Comcast leverage against content creators, internet companies, and networks that must interconnect with Comcast. It would have lead to decreased choice and increased prices for Comcast rivals and business partners and ultimately for consumers.
AT&T/DirecTV: The AT&T/DirecTV merger was approved with conditions in July 2015. In our recommendation to block the merger, we explained that it could increase AT&T's incentive to push customers away from wired connections onto wireless ones that might not suit their needs, reduce the number of pay TV options customers have in U-Verse territories, and increase AT&T's incentive to discriminate against online video. While we applauded the conditions placed on the merger, we urged the FCC to work to solve the lack of competition consumers face that cannot be resolved with merger conditions.
Charter/Time Warner Cable: Public Knowledge opposed this proposed deal. Ultimately, it was approved with conditions in May 2016. In particular, Charter agreed to not impose broadband usage caps on its customers, to not charge interconnection fees to online video providers, to offer a low-cost standalone broadband product, and to abide by a DOJ framework designed to protect programmers from the outsized leverage it will now have in carriage deals, including restrictions on its ability to keep programming from being available on online platforms. While Public Knowledge proposed broader restrictions on the merging companies, we continue to support the efforts of the FCC and the DOJ to promote competition and choice.
AT&T/Time Warner: A merger proposal between AT&T and Time Warner Cable was reported in October 2016. Again, a vertical integration between programming and distribution in particular raises a number of issues, including concerns about favoring content as well as data collection. A large-scale media merger such as this one also raises concerns that go beyond the economic-focused lens of modern antitrust. Specifically, this merger raises concerns for its effects on media pluralism, diversity, and democratic discourse, as well as concerns about the collection and use of sensitive consumer information. Although President Trump has opposed the merger, reports indicate that the deal is expected to be approved by the Department of Justice after its review.
Sinclair Broadcast Group/Tribune Media: In May 2017, Sinclair Broadcast Group announced that it has entered into an agreement to acquire Tribune Media for an estimated $3.9 billion. Among other things, Sinclair and Tribune are both large broadcast companies that control TV stations in many local markets.
Comcast/Charter: On the same day of the Sinclair announcement, Comcast and Charter announced an agreement to explore potential opportunities for operational cooperation, which included an arrangement not to merge with or acquire another wireless company without the other party’s consent for one year.
For more information:
Public Knowledge President and CEO Gene Kimmelman wrote an article for the Harvard Journal of Law and Policy entitled “Antitrust and Economic Regulation: Essential and Complementary Tools to Maximize Consumer Welfare and Freedom of Expression in the Digital Age,” which discusses many of the consolidation examples above.
For a broader look, you can read the Competition Law and Antitrust Policy page on our website here.
Competition is a nonpartisan issue. Despite calls for competition from both Democratic and Republican leaders, FCC Chairman Ajit Pai is pushing an anti-competitive agenda. Check out our latest video: