Justice Department Lawsuit to Block AT&T Merger Is the Right Decision

WASHINGTON — On Tuesday, the Department of Justice moved to block AT&T’s $85.4-billion takeover of Time Warner on antitrust grounds.

The proposed deal would combine the nation’s largest phone, internet and pay-TV provider with an entertainment and news colossus whose holdings include CNN, HBO, TBS, TNT and Warner Bros. Studios. The resulting enterprise would be worth $300 billion, nearly three times the value of Comcast after it bought NBCUniversal in 2011.

Free Press has opposed the massive merger from the start, explaining that the deal would exacerbate the lack of media diversity while giving AT&T even more incentive to violate open-internet protections and prioritize its video content over its competitors’.

Free Press President and CEO Craig Aaron made the following statement:

“Blocking this merger is the right thing to do — and we hope the Justice Department is doing it for the right reasons. This deal would give AT&T way too much power to undercut competitors and raise costs on TV viewers and internet users everywhere.

“Deals of this scale are driven by Wall Street’s insatiable desire for short-term growth at any cost. And while a few executives and bankers would get rich from a combined AT&T-Time Warner, ordinary people would be stuck paying higher prices for internet access and video services since AT&T would need to raise its rates considerably to pay down the enormous debt it would have to take on to complete this deal.

”The harms from vertical mergers are very real, where a distribution company like AT&T buys its programming suppliers. These kinds of transactions let media companies exercise even more control over both content production and distribution.

“It’s refreshing to see the Justice Department doing something about this deal. However, we remain very troubled by President Trump’s threats to punish outlets like CNN that have aired critical coverage of the administration. The Justice Department must demonstrate that Trump’s saber-rattling has nothing to do with this suit. It could start by giving the same level of scrutiny to other mega-deals like Sinclair’s proposed merger with Tribune. But the bottom line is that the public would be best served if this merger is scrapped.”