AT&T-Time Warner Proposed Merger Is Compared To Comcast Deal

Oct 24, 2016
Originally published on October 24, 2016 9:27 am
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The merger announced this weekend of the two giants AT&T and Time Warner is already raising eyebrows in both parties. Donald Trump said he opposed the $85 billion deal. And on the Democratic side, Vice Presidential nominee Tim Kaine expressed concern about media consolidation. NPR's Jim Zarroli reports that the deal is being compared to another big recent media merger that remains controversial five years later.

JIM ZARROLI, BYLINE: When AT&T announced the merger this weekend, it said it was responding to shifts in consumer tastes. People no longer want to be tethered to their TV sets. They want to access premium content over smartphones and other wireless devices. It was remarkably similar to the vision put forward by Comcast CEO Brian Roberts when his company merged with NBC Universal.

BRIAN ROBERTS: It's pro-consumer. It's going to accelerate, really, I believe, what consumers want, which is access to all the different types of content on different platforms at different times.

ZARROLI: In both deals, a major distributor of programming merged with a big content-provider. Today, the Comcast deal is arguably seen as something of a success. Analyst Jonathan Chaplin of New Street Research says NBC has been run a lot better under Comcast, though he says that could have happened if NBC were a standalone company, too.

JONATHAN CHAPLIN: They've improved its value through managing it better. But the increase in value at NBCU has got nothing to do with being attached to a cable business.

ZARROLI: Whether the merger was good for the country as a whole is another question. When the NBC deal was announced, there were fears it would make Comcast too powerful - it might threaten to withhold NBC programming from other big cable providers, for instance. But in the fast-changing media business, no one fully understood the implications of the deal.

The Justice Department signed off on the merger after extracting promises from Comcast not to abuse its position. Analyst Richard Greenfield of the research firm BTIG says, five years later, there's no sign the Comcast deal has done much for consumers. Comcast doesn't charge lower prices than other cable companies, for instance.

RICHARD GREENFIELD: I don't think you've seen new products from NBC that were created because of the merger. And so I don't think we've really seen consumer benefits at all.

ZARROLI: Comcast was accused in a lawsuit of giving its sports channels prime spots on its lineup at the expense of the Tennis Channel. And the advocacy group Public Knowledge filed a complaint against Comcast, saying its streaming service favored its own properties. Both cases are still pending. When federal regulators were asked to approve a proposed 2014 merger between Comcast and Time Warner Cable, they turned it down. One concern was the power it would have over the nation's broadband networks. Amanda Wait, a former Federal Trade Commission attorney, says regulators will scrutinize the AT&T merger more carefully than they did before.

AMANDA WAIT: I think it is fair to say that antitrust regulators are going to take a hard look at this. And I think AT&T is going to have an uphill battle and, potentially, a multi-front war.

ZARROLI: Wait says the Obama administration has become incrementally more skeptical about big mergers over the years. And the next administration isn't likely to be much more amenable to big deals. A spokesman for Hillary Clinton said this weekend that she would be asking tough questions about the merger, and Donald Trump said he would oppose the deal altogether. Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.