Public Knowledge Responds to Reported AT&T/Time Warner Merger Deal

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Press reports indicate that a merger agreement between AT&T and Time Warner may be imminent.

The following statement can be attributed to John Bergmayer, Senior Counsel at Public Knowledge.

"We understand that AT&T, since its purchase of DirecTV and its announced launch of a new online streaming service, is trying to position itself as a stronger competitor to cable.

"However, there are good reasons to be skeptical that further consolidation in the communications industry could be good for consumers. Vertical integration between programming and distribution in particular raises a number of issues: DirecTV, for instance, might favor Time Warner content, crowding out or refusing to carry alternative and independent programming that viewers might prefer. AT&T might also make it more expensive or difficult for competitors to DirecTV or to its streaming service to access Time Warner programming, hoping to drive customers to its own platforms. AT&T could also give preferential treatment to its own programming and services on its broadband networks--indeed, it has already announced that it plans to zero-rate its upcoming online video service. Increased vertical integration could also increase AT&T's opportunities for data collection, which has relevance to FCC privacy initiatives. Similar sorts of self-dealing and discrimination issues have been at the center of the review of similar deals in the past, such as Comcast's acquisition of NBC Universal.

"Ultimately, it would be AT&T's job to try to prove that this deal would benefit, rather than harm consumers and competition. As with all proposed mergers, competition authorities should carefully review an AT&T/Time Warner transaction to determine whether the substantial competitive dangers are either outweighed by demonstrable benefits or whether the dangers can be prevented with thoroughly enforceable conditions. If not, it should be blocked.

"Additionally, potential industry consolidation highlights why the FCC must move expeditiously to develop thorough privacy protections for consumers so that major industry players do not abuse the sensitive information they collect from the customers, and emphasizes the need for the FCC to vigorously enforce its Open Internet rules."

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