Franken Wants 'Highest Scrutiny' for AT&T-TW

WASHINGTON — Veteran consolidation critic Sen. Al Franken (D-Minn.) has serious issues with the AT&T-Time Warner Inc. merger, he told Federal Communications Commission chairman Tom Wheeler and Attorney General Loretta Lynch in letters to both officials on Monday (Oct. 24).

Franken urged the "highest level" of scrutiny, and could do some scrutinizing of the deal himself, or at least of the players, particularly if Democrats win back the Senate. He said he is skeptical of any further media consolidation, period.

"Combining these behemoths would create a mega media conglomerate with both the incentive and ability to use its platform to harm consumers and competitors alike," he said.

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If the deal is approved, it will almost certainly have conditions, even in a consent decree, or FCC behavioral conditions, to try and prevent that.

AT&T has said its platform would be open to competing programmers and signaled the digital rights to Time Warner programming would be available as well, but Franken signaled he is not assuaged by AT&T CEO Randall Stephenson's suggestion behavioral conditions would take care of concerns about access to content.

"I have serious doubts about the enforceability and reliability of such conditions as a remedy for anti-competitive behavior," Franken said.

He cited the Comcast-NBCUniversal deal, which he also opposed, and the protracted fight with Bloomberg TV over a "news neighborhooding" prohibition as an example of those conditions not working as advertised. He also cited AT&T's DirecTV price hikes increases and accusations that it failed to meet some commitments in the BellSouth/Cingular integration. "To the extent that AT&T has a history of going back on its commitments made in furtherance of an acquisition or merger, such history should be taken into account when evaluating Its current proposal," he said.

Combining these behemoths would create a mega media conglomerate with both the incentive and ability to use its platform to harm consumers and competitors alike," said Franken. "It could promote its own programming above that of other TV and entertainment companies or restrict other distributors' ability to offer its highly-desired content. Innovative offerings like HBO's internet streaming service [HBO Now] could be jeopardized entirely, or made available on different and discriminatory terms to broadband customers of companies other than AT&T, if such restrictions were profitable for the combined company."

He also shares the concerns of the American Cable Association about boosting the bargaining power of another large media company. "[N]either independent programmers nor small pay TV and online video distributors would be able negotiate on fair terms against the gigantic entity this massive deal would produce," he told Wheeler.

RELATED: AT&T Exec Blogs Case for Time Warner Merger

“We look forward to discussing the many benefits of this transaction with our regulators," said David McAtee, AT&T senior EVP and general counsel. "In the modern history of the media and the Internet, the U.S. government has always approved vertical mergers like ours, because they benefit consumers, strengthen competition, and, in our case, encourage innovation and investment.”

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.