Today, US District Court Judge Richard Leon ruled that the merger of AT&T and Time Warner can proceed, finding that the Department of Justice had not met its burden of proof that the effect of the combination would be “substantially to lessen competition” in violation of Section 7 of the Clayton Act. The following statement should be attributed to Gigi Sohn:
Big media conglomerates are the winners and consumers are the losers with Judge Leon’s decision. Merging AT&T, one of the largest cable, satellite and mobile broadband companies with Time Warner will lead to higher prices, fewer choices and perhaps more importantly, fewer voices. Coupled with the demise of the 2015 net neutrality rules yesterday, AT&T will be free to favor Time Warner content over its cable and its fixed and mobile broadband networks.
This ruling will open the floodgates, at a minimum, to more vertical mergers of this kind. Comcast will bid for Fox’s assets. Other cable and broadband companies will look to merge with the remaining Hollywood studios and other programmers. Even parties seeking horizontal mergers, like Sprint & T-Mobile, will try to use this decision to justify shrinking competitors in the same market.
While much of the press focus will inevitably be on the merging companies and Wall Street, consumers will see absolutely no benefit. Like the many media mergers that have come before this one, consumers will be left with higher cable and broadband prices, less control over what they want to watch and decreased diversity of news and programming.
The Justice Department should appeal this decision to the Court of Appeals for the District of Columbia Circuit without delay.
Gigi Sohn is a Distinguished Fellow at the Georgetown Law Institute for Technology Law & Policy, a Mozilla Fellow and the Benton Foundation Public Advocate. She was Counselor to former FCC Chairman Tom Wheeler from November 2013-December 2016. Gigi can be reached for comment at the above email address or at 202-253-0876. More on Gigi can be found at gigisohn.com.