Submitted by Mike Krieger via Liberty Blitzkrieg blog,
Dangerous consolidation of the media is a trend that has been discussed by many people on many occasions, and many of us by now have heard the stat that in the U.S. just six media giants control 90% of all TV, news, radio and film. Now that Comcast is set to buy Time Warner, the situation is about to get that much worse.
Many people write about the struggle between “liberty” and “tyranny,” including myself, but these may not be the most effective terms to use in order to explain the troubling situation we face to a wider audience. Unfortunately, when people hear the words “liberty” the knee-jerk reaction for many is to associate it with right-wing “conspiracy theorists.” Of course, it is “conspiracy fact” that a small handful of corporations and the executives that run them control more and more of our daily lives. In other words, the forces of “tyranny” use “centralization” as their primary weapon of choice in order to control us. Those of us who long for “freedom” and “liberty” must use “decentralization” as our primary tool to fight back and win.
– From the 2014 post: The Comcast/Time Warner Merger and the War Between Centralization and Decentralization
Forget the Carrier deal, and forget the infamous tweet recently directed at Boeing. If Trump is serious about protecting the American public and being the populist leader he claimed he would be, he will aggressively push back against the proposed AT&T-Time Warner mega merger.
On the campaign trail, Mr. Trump appeared to take a strong stance against a deal that would further consolidate an already grotesquely consolidated media and telecom environment, but concerns have arisen as of late that point to a contradictory position.
As Fortune recently reported:
During his campaign for President, Donald Trump declared that he would not approve a proposed merger between AT&T and Time Warner on the grounds the deal represented “too much concentration of power in the hands of too few.” But as with so much else when it comes to Trump, it appears that vow is negotiable.
On Thursday, the Financial Times reported that Trump’s transition team assured AT&T they would review the deal with an open mind, and that company executives came away confident that the deal would pass regulatory scrutiny.
If this is indeed the case, Trump supporters should see it as a massive betrayal, as well as a sign that Trump, like his predecessors, will rule on behalf of the status quo elites when it comes to the truly big policy decisions.
For a little background of why this particular merger is so detrimental to American consumers, let’s take a look at the statement prepared by Sen. Patrick Leahy’s office ahead of today’s hearing on “Examining the Competitive Impact of the AT&T-Time Warner Transaction.”
Today, the Judiciary Committee examines the competitive impact of AT&T Inc.’s proposed acquisition of Time Warner Inc. The proposed $85.4 billion merger could dramatically transform our nation’s telecommunications and media landscape, combining two titans of industry. AT&T is the nation’s second-largest wireless carrier, largest pay-television provider, and third-largest broadband provider, while Time Warner is a massive media conglomerate that owns CNN, HBO, and the Warner Bros. Studio. This proposed massive consolidation of distribution and content raises serious questions. The impact of this transaction on competition, consumer choice, and privacy across the media, pay TV, wireless and broadband industries must be carefully analyzed.
Today’s hearing is a crucial conversation about looming concentration in industries that create and distribute the media that millions of Americans consume every day. Americans are consuming media content in increasingly fragmented ways – on their smart phones and ipads, not just on their televisions. At the same time, the distributors and producers of this content are rapidly consolidating. Given that Americans depend upon these companies to learn about and stay connected to the world around them, it is critically important to preserve affordable access to a diversity of views and ideas. This proposed merger raises serious questions about this prospect and we must carefully consider whether it will benefit consumers in Vermont and across America.
More than 130 million Americans depend upon AT&T for their wireless internet access. Last year, AT&T acquired DirecTV’s satellite television service. AT&T is now trying to acquire Time Warner’s content. These acquisitions raise serious concerns about whether AT&T could begin to act as a biased gatekeeper for its own affiliated content and services. Questions are already being raised about AT&T’s decision to not charge its wireless customers for data used to view DirecTV on their phones. Anti-competitive and anti-consumer actions by Internet gatekeepers can be prevented under the FCC’s 2015 Open Internet rules. Those rules establish clear and enforceable bright-line prohibitions on blocking, throttling and discriminating against lawful content on the Internet. Meaningful net neutrality protections ensure that the Internet remains an open platform that fosters innovation and free speech.
Strong net neutrality rules help mitigate concerns about a post-merger AT&T’s ability to harm competitors and consumers. Yet these very net neutrality rules that currently protect consumers appear to be under serious threat by the incoming administration. President-elect Donald Trump has been openly opposed to net neutrality. He has formally named three staunch net neutrality opponents to oversee his FCC transition. Any weakening of these rules will cause serious harm to consumers – harm that could be exacerbated by further mergers in this industry. That harm is not limited to this transaction, but would impact all Americans who rely on the free exchange of ideas and information on the Internet.
Over the past few years, at every hearing held by the Judiciary Committee to discuss a proposed transaction we have heard the same buzzwords used to justify further consolidation. These buzzwords are used in industries as different as beer, health insurance, agricultural seeds, or pay- television. We have heard about the vertical integration of complementary portfolios. We have heard about how there will be no further reduction in competition. We have heard that further consolidation is needed to compete with some other entity not involved in the transaction. We have heard about increased innovation achieved through cost savings. We have heard that the merged companies will retain every incentive to serve consumers well. I have no doubt we will hear many of those same arguments today.
While massive corporations continue to forcefully defend these claims in service of their bottom line, the American people are facing an economy that is increasingly defined by a small number of dominant corporations and a shrinking number of small, independent competitors. I am deeply skeptical that this highly-consolidated economy is leading to better results for consumers in Vermont and across the country.
Even President-elect Trump has noted the downsides of this major movement towards consolidation when he shared his opinion on the campaign trail that this transaction is “too much concentration of power in the hands of too few.” Mr. Trump even went so far as to say his administration would not approve the transaction. Now, in a sudden shift of tone, press reports suggest that the merging parties are being told by members of Mr. Trump’s transition team that the transaction has a good chance of being approved.
Whether or not this transaction and others in the future are ultimately approved will rest with the antitrust authorities, including the people Mr. Trump nominates to positions at the Department of Justice, the Federal Trade Commission, and the Federal Communications Commission. As he makes those selections, as the Senate considers the nominees he selects, and as those people go about their jobs if they are confirmed, we must all recommit ourselves to protecting the hallmark principle of the American economy – competition.
I thank Senator Klobuchar and Senator Lee for holding this hearing today and looking forward to the testimony of the witnesses.
With all that in mind, I want to turn your attention to a few excerpts from an excellent post published late last month titled, Net Neutrality Shouldn’t be a Debate – It’s a Symptom of Something Worse: Gatekeepers:
Net neutrality should not even be a debate. Any market actor who abuses their customers and trust to the level of not respecting net neutrality, on a functioning market, will be dropped like a bad habit. Therefore, the mere existence of a net neutrality debate is a symptom of something much worse: the existence of gatekeepers. That’s the underlying problem that needs to be solved.
A politician who trusts the telco industry or the cable industry to roll out the Internet needs to have their brain examined. These two industries will be obliterated when every household has good fiber, and they’re trying to delay that point in time for as long as they can possibly get away with: it’s in the strategic interest of both telco and cable industries to obstruct Internet rollout for as long as is possible.
Ponder this: the telco industry wants to charge me by the minute, plus a fixed monthly fee, for usage of a 9.6-kilobit connection to my home that can only be used for their voice application. How does this compare to having a monthly fee in the same ballpark for an unmetered, fixed fee, general purpose, 100-megabit connection to my home, that I can use for anything I want as much as I want? Why would I ever look toward the old telcos again? The telcos are just dead in the water, and they know it. (By the way, sending a text message next door is literally more expensive than sending the same data from Mars, because the telcos are charging a fifteen billion per cent markup.)
This doesn’t even begin to describe how utterly destroyed the cable industry is. On YouTube alone, people upload 300 hours of video per minute – put differently, YouTube alone serves the equivalent of 18,000 (eighteen thousand!) 24-by-7 TV channels. Granted, most of these are utter crap, so it’s exactly like the cable networks. The Internet has practically already obliterated the cable TV industry, and their only hope is to destroy, delay, and/or obstruct the Internet to milk the last drops of money from an old world that no longer exists.
Indeed, it seems this is the actual intent of AT&T and Time Warner executives with the proposed merger. They want to “milk the last drops of money from an old world that no longer exists.” As is typically the case, the people who will be harmed most by this will be average American citizens. As such, if Trump is truly a populist, he will stand strongly against the deal. If he doesn’t, it will only raise further concerns about where his real loyalties lie.