“On Tuesday, a federal judge granted AT&T’s longstanding wish to acquire Time Warner,” Jared Newman writes for TechHive. “The purchase will combine a major provider of internet and TV service with a major media conglomerate that owns television networks, studios, and entertainment properties.”
“At the moment, it’s unclear whether the government will appeal the case. But assuming the merger proceeds, we can already predict what it could mean for cord-cutters. In the short term, the merger might provide some consumer benefits, as AT&T upholds the promises it made while pitching the public on its plans,” Newman writes. “But those benefits will come at a cost, as more companies that control your internet access gain a tighter grip on the content flowing through their pipes.”
“If you subscribe to DirecTV Now and have AT&T wireless service, AT&T will let you watch unlimited television on your phone without counting it against your data cap. Hypothetically, AT&T could now expand that benefit to HBO Now and other Time Warner-owned streaming services,” Newman writes. “That sounds nice on the surface, but it also creates an unlevel playing field for other services, such as Netflix and Sling TV, if they want to reach AT&T’s customers. They can exempt their own services from data caps as well, but only if they pay AT&T for the privilege. By owning more must-have streaming services, AT&T can put more pressure on its competitors to pay the toll, and those costs would inevitably be passed onto customers.”
“AT&T’s acquisition of Time Warner is rare in that it combines a producer of content (Time Warner) with a content distributor (AT&T),” Newman writes. “By allowing this kind of merger to proceed, the court has signaled that it might welcome so-called “vertical” mergers, which is why, one day after the ruling, Comcast launched an attempt to outbid Disney on assets from 21st Century Fox. Such a deal would have all kinds of important ramifications, but perhaps the most pertinent to cord-cutters is that Fox owns 30 percent of Hulu, as do Disney and Comcast respectively. (AT&T, incidentally, will own the remaining 10 percent through Time Warner.)”
Read more in the full article here.
MacDailyNews Take: It’ll certainly be interesting to see how all of this proceeds. Hopefully enough competition exists to drive down costs for consumers.
Comcast bids $65 billion for 21st Century Fox assets, topping Disney – June 14, 2018