Why AT&T-Time Warner Merger Is Bad News for Everyone
- Category: Software
- Author: Admin
- April 19,2018
On 18th April 2018, an anti-trust trial was held in the federal court concerning the merger of AT&T and Time Warner. The 85 billion dollar merger raised some eyebrows as it was viewed by the Justice Department as a step that would lead to rise in prices for customers and inhibit innovation.
Time Warner CEO Jeffrey Bewkes gave his arguments in favour of the deal. He believes that the merger is necessary to compete effectively with internet giants such as Google and Facebook on advertising.
Jeffrey Bewkes, Time Warner CEO for more than a decade, told Judge Richard Leon that it is inaccurate to think that the merger will result in AT&T will not license Warner’s TV and movie content to rivals as it would cause a loss in revenue to both AT&T and Time Warner.
This issue has been going on for about a month now and has sparked controversy across the globe. A number of witnesses have testified against the merger stating how it directly affects them.
Now, why is this issue so important?
AT&T is a major communications company that provides the media necessary to transmit data over the Internet. It provides Internet to millions of users across the US. However, it had nothing to do with the content it was responsible for transmitting. The content was left to content providers such as HBO, Warner Bros etc.
Now the service providers such as AT&T and Comcast are jumping into the business of content delivery and this has caused a wave of concern across numerous users. And it is a genuine cause too. For many decades, the medium and content were viewed as separate domains. The companies that provided the medium were responsible for hardware and cabling. In return, they charged a nominal amount from its users. Companies such as AT&T and Comcast fall in this category. The content or data that was transmitted over this medium was of no concern for these companies.
The internet is an ocean of data and the content providers such as Time Warner were responsible for providing content to providers such as movies, TV series etc. They generated revenue through advertising.
It is speculated that after the AT&T-Time Warner merger, all the content belonging to Time Warner will be exclusive to AT&T customers only or it will be available at a higher cost to other providers. Also, to provide the users with equal access to all content it is paramount that the medium providers and content providers keep a distance from each other.
Another aspect of such a merger is that one the deal is finalized, AT&T could restrict access to the rival content providers to promote Time Warner content. This will eventually lead to lack of freedom to the users as their right to choose will be in question. Content providers such as AT&T could also manipulate the performance of the rival content providers.
This is where the whole concept of net neutrality comes into context. As per the concept of net neutrality, all data should be treated equally and no website or service should be given priority over the other. However, this concept seems as a distant reality when service providers start to own content as well.