U.S. Department of Justice Files Appeal to Block AT&T and Time Warner Merger

[sw1tcher]

@cmwade77

"The evidence overwhelmingly showed that this merger is likely to enhance competition substantially, because it will enable the merged company to reduce prices, offer innovative video products, and compete more effectively against the increasingly powerful, vertically integrated 'FAANG' [Facebook, Apple, Amazon, Netflix, and Google] companies," AT&T told US District Judge Richard Leon in the brief.

"There is no sound evidence from which the Court could fairly conclude that retail pay-TV prices are likely to increase," AT&T said in that same filing. - Ars Technica

@cmwade77 said AT&T promised not to raise prices. Where does AT&T make that promise?

I see the part about how "it will enable the merged company to reduce prices" and they did by offering WatchTV at $15 per month. AT&T never offered a $15 streaming tv service before, but because of the merger they can now.

So AT&T did exactly what they said the merger would allow. From the same Ars Techica article you linked to:

AT&T's brief pointed out that the Justice Department walked back some of its price claims during the trial. "The government concedes that Turner will not withhold content [from other pay-TV operators], and it concedes that the merged entity will reduce its own consumer pay-TV prices," AT&T wrote.

Price benefits should flow to consumers quickly, AT&T's filing said. "[C]ertain merger efficiencies will begin exerting downward pressure on consumer prices almost immediately [after the merger]" AT&T wrote.

Has AT&T withheld content from other pay-tV operators? No.

Did AT&T reduce its own consumer pay-TV prices? Yes.

Are price benefits flowing to consumers quickly? Did the merger efficiencies exert downward pressure on consumer prices almost immediately? Yes, as evidenced by new WatchTV streaming service at $15 per month.

 

[69Mustang]

Where does AT&T make that promise?
I see the part about how "it will enable the merged company to reduce prices" and they did by offering WatchTV at $15 per month. AT&T never offered a $15 streaming tv service before, but because of the merger they can now.

Creating a low content budget tier while raising the price on your higher tiers is what you consider reducing prices? I'm not sure if you're serious. I think you are, but I don't know why you are.

So AT&T did exactly what they said the merger would allow. From the same Ars Techica article you linked to:

AT&T's brief pointed out that the Justice Department walked back some of its price claims during the trial. "The government concedes that Turner will not withhold content [from other pay-TV operators], and it concedes that the merged entity will reduce its own consumer pay-TV prices," AT&T wrote.

That evidence doesn't say what you think it does and it definitely doesn't support your position at all. Turner not withholding content is immaterial. That has nothing to do with pricing. The merged entity did not reduce it's pricing. It raised it's consumer prices so the DOJ was wrong.

Price benefits should flow to consumers quickly, AT&T's filing said. "[C]ertain merger efficiencies will begin exerting downward pressure on consumer prices almost immediately [after the merger]" AT&T wrote.

That didn't happen. In fact, the opposite happened. Proof of that starts in the very next paragraph:

"Owning Time Warner gives AT&T more control over how much it pays for the programming it offers to DirecTV customers, because it no longer has to negotiate with a third party for Time Warner content."
Derp. That confidence somehow turned into this:

"To continue delivering the best possible streaming experience for both new and existing customers, we're bringing the cost of this service in line with the market—which starts at a $40 price point," AT&T said.

They were always going to raise prices. I know it. You know it. The government knew it. Protestations otherwise was simply the same lip service companies give the government to get approval.

 

[sw1tcher]

You see it one way. I see it another.

We'll just have to see what the court of appeals decides.

 

[Swift]

I think they should undo this deal, and Comcast's purchase on NBC, and Disney's purchase of Fox Broadcasting. Screw the ISPs. They're public monopolies, and they should have ONE job: building the fastest internet known to man, and the safest one, so we can do the hell what we want. Watch what we want. All cable line-ups should be software, like YouTubeTV. Also, they should provide high-speed internet to rural areas, subsidized by formulas.

 

[Mac 128]

Creating a low content budget tier while raising the price on your higher tiers is what you consider reducing prices? I'm not sure if you're serious. I think you are, but I don't know why you are.


That evidence doesn't say what you think it does and it definitely doesn't support your position at all. Turner not withholding content is immaterial. That has nothing to do with pricing. The merged entity did not reduce it's pricing. It raised it's consumer prices so the DOJ was wrong.


That didn't happen. In fact, the opposite happened. Proof of that starts in the very next paragraph:

"Owning Time Warner gives AT&T more control over how much it pays for the programming it offers to DirecTV customers, because it no longer has to negotiate with a third party for Time Warner content."
Derp. That confidence somehow turned into this:

"To continue delivering the best possible streaming experience for both new and existing customers, we're bringing the cost of this service in line with the market—which starts at a $40 price point," AT&T said.

They were always going to raise prices. I know it. You know it. The government knew it. Protestations otherwise was simply the same lip service companies give the government to get approval.

And you're being disingenuous. I'm no fan of corporations, but it would be beyond ridiculous to assume this statement from a business mean they would NEVER raise prices, regardless of what the competition or the economy did. It's a business. They're going to raise prices based on any number of market forces, including inflation, and vendor behavior. Owning Time Warner is not the only factor in what costs they pass along to the consumer, they also offer programming from many other sources who may charge more or less based on their own business needs. So I see no evidence of any promise not to ever raise prices, but taking those statements out of context and applying them in a vacuum will support whatever point you decide to make. Clearly I, and others here don't agree with your point, and refer you to the actual context of what's being discussed. Not the fantasy spin doctoring of Trump's DOJ. I mean we all know this is really about punishing "fake new" CNN, right?

 

[69Mustang]

And you're being disingenuous. I'm no fan of corporations, but it would be beyond ridiculous to assume this statement from a business mean they would NEVER raise prices, regardless of what the competition or the economy did. It's a business. They're going to raise prices based on any number of market forces, including inflation, and vendor behavior. Owning Time Warner is not the only factor in what costs they pass along to the consumer, they also offer programming from many other sources who may charge more or less based on their own business needs. So I see no evidence of any promise not to ever raise prices, but taking those statements out of context and applying them in a vacuum will support whatever point you decide to make. Clearly I, and others here don't agree with your point, and refer you to the actual context of what's being discussed. Not the fantasy spin doctoring of Trump's DOJ. I mean we all know this is really about punishing "fake new" CNN, right?

I think you're 100% right. It would be ridiculous to assume that statement from AT&T meant that they would NEVER raise prices. Almost as ridiculous as reading my quote and somehow coming to the conclusion that I was implying anything like that. I'm genuinely curious what you read that lead you down that path. Certainly nothing in my quote. My quote answers the question of when did AT&T say they wouldn't raise pricing. They said it in the DOJ hearing and turned around right after approval and raised pricing.

Like I said, we all knew they were going to do it. It's not like they don't have a history -document history- of lying to get governmental/shareholder approval for M&A projects. They aren't the only ones, but they are the ones who are the topic here.

Hey bud do me a favor. If we're going to continue discourse, can you park your politics over there somewhere? If you can't that cool too. I just won't participating.

 

[cmaier]

This sounds unconstitutional to me... is this not Double Jeopardy? You can't take someone to court for the same thing twice.

Edit: I've changed my mind. Initially it was more of a hypothetical "will this lead to a monopoly?" and now they have new evidence more along the lines of "this is a monopoly".

1) even criminal trial results can be appealed. It's not "double jeopardy" until final resolution, after all appeals.
2) this isn't criminal, it's civil, so double jeopardy isn't an issue
3) this isn't a person

 

[69Mustang]

1) even criminal trial results can be appealed. It's not "double jeopardy" until final resolution, after all appeals.
2) this isn't criminal, it's civil, so double jeopardy isn't an issue
3) this isn't a person

But, but, bu... b... who the hell are you to tell me what is and what isn't double jeopardy? Alex Trebek? Tommy Lee Jones (2 pts if you get this reference)? This is America dammit. Home of the free, and the land of the brave. Besides, I got those terms all from an episode of law and order. They must be good for somethin'.

 

[2010mini]

Interesting, I thought they were just a cable company.

That’s TWC. Time Warner INC is a different company.

 

[sw1tcher]

My quote answers the question of when did AT&T say they wouldn't raise pricing. They said it in the DOJ hearing and turned around right after approval and raised pricing.

Your quote does not show AT&T said they would not raise prices.

Your quote:

"The evidence overwhelmingly showed that this merger is likely to enhance competition substantially, because it will enable the merged company to reduce prices, offer innovative video products, and compete more effectively against the increasingly powerful, vertically integrated 'FAANG' [Facebook, Apple, Amazon, Netflix, and Google] companies," AT&T told US District Judge Richard Leon in the brief.

"There is no sound evidence from which the Court could fairly conclude that retail pay-TV prices are likely to increase," AT&T said in that same filing.

Reading the part about how "it will enable the merged company to reduce prices" doesn't imply that AT&T won't raise prices. I understand it to mean that AT&T can reduce prices if it wants to. But that's not the same as AT&T saying it will reduce prices or that AT&T won't raise prices.

The same goes for this: "There is no sound evidence from which the Court could fairly conclude that retail pay-TV prices are likely to increase." AT&T isn't promising here that they won't raise prices. AT&T is stating here that they won't raise prices as a direct result of the merger.

Did AT&T raise the price of DirecTV Now by $5? Yes. Can that increase be directly tied to the merger? No. Does the timing of the price increase look fishy? Yes. But without actual evidence linking the two, that won't hold up in court.

Plus, AT&T isn't the only one to have raised prices this year. YouTube TV raised prices by $5 in March. SlingTV raised prices by $5 this month. Amazon raised their Prime price in May. Cable companies such as Comcast raised their prices earlier this year. Why is the DirecTV price increase being viewed differently?