Michael Reagan: Trump Right to Worry About AT&T, Time Warner Merger
Today, the Senate Judiciary committee will hold a significant hearing on the proposed $84 billion merger between AT&T and Time Warner, which owns CNN.
AT&T's CEO Randall Stephenson will be testifying, as well as others, who support or oppose this merger. The senators should be prepared to ask Stephenson some tough questions – because allowing this merger will have important implications for a free press and American democracy for many years to come. During the recent election candidate Trump said, "AT&T is buying Time Warner, and thus CNN, a deal we will not approve in my administration because it's too much concentration of power in the hands of too few."
Since then, a number of press reports – no doubt pushed by AT&T – are suggesting President Trump will have a laissez-faire approach and the deal will go through. Knowing of the grassroots concerns that many conservative leaders share, I doubt President Trump or Congress will rubber stamp this deal.
Trump was right when he warned of the massive concentration of media power in a few hands. Consider that today 90 percent of cable television networks are owned by just six companies: Time Warner (CNN), Viacom, CBS, ABC, Comcast (NBC) and 21st Century Fox. Of these major conglomerates, only Fox gives conservatives a fair shake. New, independent networks like NewsmaxTV are on the rise, but the big media still controls, dangerously, the flow of information to the public. Trump was their most recent victim.
A combination of AT&T and Time Warner will be toxic, further constricting competition and press diversity. AT&T is a giant media company which also owns DirecTV. They also were a major corporate backer of Hillary Clinton's presidential campaign. They strongly opposed Donald Trump's election.
Time Warner's CNN was nothing short of the "Clinton News Network" – a 24-hour propaganda machine spewing out anti-Trump and anti-Republican venom.
Right now AT&T has 26.3 million pay TV subscribers through DirecTV and ATT U-verse service – controlling about 25 percent of the U.S. cable market. They are the largest cable/satellite operator in the U.S. bar none. By owning the largest chunk of cable home distribution, AT&T will obviously be in a position to favor their own channels like CNN, over other channels like Fox News, Newsmax and many others. The ability for AT&T to discriminate against other cable networks that could compete against CNN or their other networks would be endless.
AT&T, which controls a huge percent of the mobile telephone market, could exempt its mobile customers from data usage charges if they stream CNN content, but streaming independent news networks like Newsmax might continue to count against high speed data caps.
Frankly, I am usually in favor of government keeping its hands-off business activities. But there are exceptions. When certain businesses act like monopolies or near monopolies, have unusual access to publicly-owned or controlled distribution systems, and get preferential access to broadcast/satellite airwaves, then government has a compelling need to insure that such media companies act in a fair way to insure competition and the diversity of public opinion.
We already know that vertical integration of cable operators undermines competition. For example, when Comcast completed its merger of NBC back in 2011, it promised that it would not favor its own channels over other channels. It agreed to a condition that would have put the Bloomberg financial news channel on equal footing with CNBC across its distribution platform. It is well known that Comcast never honored the condition. For this and other reasons, Comcast's recent effort to merge with Time Warner was rejected.
AT&T has not demonstrated, in my opinion, a real desire to support the public's interest in the areas of competition, diversity and fairness. Recently the Department of Justice sued AT&T and its subsidiary DirecTV for price fixing and illegally colluding to harm consumers.
There are many reasons why the FCC and Congress needs to handle this merger with intense scrutiny and remember this is not a business decision, but a matter that affects our democratic institutions. President-elect Trump knows this firsthand. [more...]
Michael Reagan is the son of President Reagan and chairman of the Reagan Legacy Foundation. A New York Times best-selling author, he is a commentator for Newsmax.