Kimmelman: DirecTV Now Could Benefit Consumers

Public Knowledge president Gene Kimmelman says that AT&T's DirecTV Now online video service "could benefit consumers significantly" but argues there is no guarantee of that, "[i]f a single company is able to control many of the key inputs to online video, from content production to last-mile transmission."

That is according to a preview of his thoughts on the proposed AT&T-Time Warner merger in advance of his testimony on the deal at a Senate Antitrust Subcommittee hearing Wednesday.

In a statement, Kimmelman said services like DirecTV Now and Sling TV and their head-to-head competition among themselves and with traditional video "could drive prices down and move more viewers to a world that breaks free of the traditional cable bundle."

AT&T has been billing the deal as a way to provide that cable competition.

“Allowing viewers more choice over the programming they want will ensure that programming that people actually want to see gets funding, creating more opportunities for diverse and independent programmers. And online viewers, if not MVPD subscribers, may finally be free of the rented set-top box," Kimmelman said.

Public Knowledge was a big backer of FCC chairman Tom Wheeler's set-top box reform proposal, but that was a casualty of copyright concerns that prevented three Democratic votes for the proposal, then a new administration-elect's warning about acting on controversial items.

“But the fact that the technology and business models of online video may allow for a better world for consumers is no guarantee that it will actually happen," he said.

Kimmelman will be raising a number of concerns about the deal with legislators, including that it "could" lead to higher prices and fewer, less diverse, choices.

"The vertical integration of programming and distribution would give AT&T the incentive and ability to restrain competition by raising the costs its rivals must pay for Time Warner programming," he said. "AT&T can already harm its video distribution competitors by making it more difficult to reach customers on its networks; acquiring Time Warner programming would increase AT&T’s incentive to harm rivals in this way."

He also said that his concerns go beyond just the "economic-focused lens" of antitrust, which is the purview of Justice, to the effects on "media pluralism, diversity, and democratic discourse, as well as concerns about the collection and use of sensitive consumer information," which would be part of an FCC review or FCC advice to Justice if the deal does not have to be filed with the FCC. An AT&T source said that where it would be filed remained an open issue.

“This is the time for antitrust authorities to send a message that competition, not anticompetitive consolidation, is the way to produce lower prices and better services for consumers," he said. "This deal, however, could represent a step in the wrong direction.”

President-elect Donald Trump, whose FCC or Justice Department will be doing the heavy lifting on the deal, has threatened to try to block it.

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.