competition

In the wake of a federal appeals court victory, AT&T moved quickly to consolidate control over the Time-Warner media companies it now owns. The apparent strategy is to meet Netflix head on as a content competitor. The initial signs are not encouraging.

As well reported by Jessica Toonkel in The Information, the top executives of HBO and Turner, two of the three Time Warner divisions acquired by AT&T (the third is the Warner Bros.… More

The judge who unconditionally blessed AT&T’s purchase of Time Warner’s content companies “rejected fundamental principles of economics”, according to a motion filed by the federal justice department as it launched its appeal of that decision…

The “assumption” the court criticized was the fundamental economic principle, recognized in case law, that the merged firm would maximize its corporate-wide profits (rather than instruct Turner and DirecTV to operate independently at the expense of overall profits to the parent corporation).

In a terse filing, the federal justice department gave notice last week that it is appealing a judge’s decision to allow AT&T to buy Time Warner’s content companies, with no strings attached.

The justice department didn’t outline a specific goal, but one possibility is that it wants AT&T to give up some of its new empire, perhaps Turner channels such as CNN. According to a story in Variety by Ted Johnson, it could turn out to be a risky maneuver…

Larry Downes, senior industry and innovation fellow at the Georgetown Center for Business and Public Policy, said that the Justice Department’s appeal carries risks for the government.

A federal judge decided yesterday that AT&T may buy Time Warner’s video and motion picture content companies, including HBO, CNN and the Warner Brothers movie studio. Judge Richard Leon, who was appointed by president George W. Bush, put no conditions on the acquisition. He simply ruled “the government’s request to enjoin the proposed merger is denied”.

The 172 page decision does an excellent of outlining the current state of the video distribution market. AT&T wants to buy Time Warner so its DirecTv and other video services – delivered via satellite and mobile and wireline networks – can better compete with the likes of Netflix, Comcast (which also owns an extensive stable of content companies) and Amazon.… More

It’s up to a federal judge to decide whether or not AT&T can buy Time Warner, and all the content and video channels that come along with it. The federal justice department tried to make the case that the deal would be anti-competitive and should be blocked. AT&T, naturally enough, claimed it wasn’t.

Some experts who followed the trial closely thought AT&T made the better case. The justice department has to prove that a vertical merger – when a company buys its supplier – would have the same destructive effect on competition as a horizontal one, when a company buys a competitor.… More