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Public Knowledge President Gene Kimmelman will testify before the U.S. Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights this Wednesday, December 7 at 10:00 a.m. His testimony in the hearing on “Examining the Competitive Impact of the AT&T-Time Warner Transaction” will argue that this vertical merger poses significant consumer harms by restraining competition and violating consumer privacy.
The following may be attributed to Public Knowledge President Gene Kimmelman:
“The online video marketplace, despite a number of established players like Netflix and Youtube, is still relatively nascent, and services like DISH’s Sling TV and AT&T’s DirecTV Now could benefit consumers significantly. Head-to-head competition between major services could drive prices down and move more viewers to a world that breaks free of the traditional cable bundle.
“Allowing viewers more choice over the programming they want will ensure that programming that people actually want to see gets funding, creating more opportunities for diverse and independent programmers. And online viewers, if not MVPD subscribers, may finally be free of the rented set-top box.
“But the fact that the technology and business models of online video may allow for a better world for consumers is no guarantee that it will actually happen. If a single company is able to control many of the key inputs to online video, from content production to last-mile transmission, then the competitive promise of this new market could be snuffed out, or at least limited, as familiar names seek to turn online video into Cable 2.0.
“The proposed merger of AT&T and Time Warner could create a number of competitive harms, leading to higher costs and fewer choices for video services and lower-quality and less diverse programming. The vertical integration of programming and distribution would give AT&T the incentive and ability to restrain competition by raising the costs its rivals must pay for Time Warner programming. AT&T can already harm its video distribution competitors by making it more difficult to reach customers on its networks; acquiring Time Warner programming would increase AT&T’s incentive to harm rivals in this way.
“Of course, a large-scale media merger such as this one also raises serious 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. In considering the implications of this deal, policymakers should take into account not just the effects on competition, but the effects on consumer access to information, as well.
“This is the time for antitrust authorities to send a message that competition, not anticompetitive consolidation, is the way to produce lower prices and better services for consumers. This deal, however, could represent a step in the wrong direction.”
You may view the testimony here.