Innovation or Monopoly? Panel Looks at AT&T-Time Warner Deal

Senators scrutinizing the proposed merger of AT&T and Time Warner homed in on brass tacks with the companies' CEOs. OK, you say this $85.4 billion mega-deal will enhance, not quash, competition and benefit consumers. Will it actually reduce prices that consumers pay?

AT&T CEO Randall Stephenson [pictured here] assured the members of a Senate antitrust panel Wednesday that yes, "We will bring the consumers better price options than what they have today." He said, though, that it wasn't possible at this point to separate how much of the anticipated savings would go to customers of the company's DirectTV, broadband and mobile phone services.

Stephenson and Time Warner CEO Jeffrey Bewkes made the case that the combined company would push technology forward and lead to more choices for customers. "Together, AT&T and Time Warner will disrupt the entrenched pay-TV models, giving customers more options, creating more competition for cable TV providers and accelerating deployment of 5G wireless broadband," Stephenson testified.

In hours of questioning before the Senate Judiciary antitrust subcommittee, the skepticism of some senators seemed to deepen over what would be one of the largest media mergers ever.

"I have yet to be convinced" that the benefits of the merger outweigh the potential negative effects on competition, Sen. Richard Blumenthal, D-Conn., told Stephenson and Time Warner CEO Jeffrey Bewkes.

Panel chairman Sen. Michael Lee, R-Utah said, "The potential anticompetitive favoritism that the combined firm could bestow on its own products is not limited to price or access, but extends to the quality of the offerings as well."

The deal must win approval from federal regulators. It would bind the second-largest U.S. telecommunications company with a media and entertainment conglomerate that owns CNN, HBO, the "Harry Potter" franchise and pro basketball. It's a big-time bet on a partnership between a company that distributes information and entertainment to...

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