News outlets reported last week that the Department of Justice intends to block the merger of AT&T and Time Warner on antitrust grounds. Depending on who is talking, a condition of approval is the sale of either CNN or DirecTV by AT&T.
I’m no mergerologist, but this seems weird. I agree there’s a good argument for blocking the merger. But that argument is predicated on the lack of competition in the broadband space. Neither DirecTV nor CNN are broadband providers.
However, the president has very publicly decried what he views as unfair coverage by CNN. Of course it follows that the DoJ’s objections are perceived to be driven by political concerns from the White House. This is especially true given the “business friendly” moniker claimed by the administration.
I’m not inclined to give the White House the benefit of the doubt, but there’s an argument for this that I’d buy. There’s an inherent danger involved when the same company owns both the content and the delivery. This gives the company the opportunity to crowd out competitors in an anticompetitive manner.
What makes this confusing is the DirecTV part. TV and Internet are often combined. Adding in satellite doesn’t seem to materially change the landscape. It’s essentially the same service over a different medium. Cynically, it’s a cover to make it look like the CNN sale isn’t politically-driven.
I have a hard time taking that argument at face value. That may be my own distrust of the Trump administration, but it doesn’t seem to make sense. Even the parts of the argument where I agree with in the ends, the means don’t seem to mesh. It will be interesting to see how this proceeds.