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Federal Judge Approves AT&T-Time Warner Merger
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12 Jun 2018 10:49 PM EST

By Laura Tucker, Staff writer; Image: AT&T and Time Warner logos (Image source: Public Domain)

 

A federal judge ruled today on a proposed merger between AT&T and Time Warner. Judge Richard Leon approved this deal, going against the wishes of the government. The question is what this could possibly mean for you in the future as a consumer.

AT&T and the Justice Department faced off in a six-week trial. Judge Leon did not believe the government proved their case, that the $85 billion acquisition violated antitrust law.

AT&T is already a huge corporation. It may have started as Ma Bell, but they've grown from a phone monopoly to also including mobile phones, Internet, and dish and cable TV services. It's the world's largest telecommunications company, the second largest mobile phone service, and still the largest provider of landline phone services, (https://en.m.wikipedia.org/wiki/AT%26T)according to Wikipedia.

Time Warner is the world's third largest entertainment company with regards to revenue, with Comcast and The Walt Disney Company taking the top two spots. They were formed in 1990 with the merger of Time Inc and Warner Communications. Time Inc. is no longer part of the company, however. They own HBO, Turner Broadcasting System, The CW, Warner Bros., CNN, DC Comics, and Hulu.

This means this merged company will now own landline phone services, a mobile phone service, Internet service, dish and cable TV services, and several entertainment outlets. It seems there isn't much they won't be able to do.

The acquisition was initially announced in October 2016, with the Justice Department suing one year later. They felt it would harm competition and raise prices for consumers. While Judge Leon could have rejected the deal or demanded certain conditions were met, he instead let the deal go through with no conditions.

"The Government has failed to meet its burden of proof to show that the merger is likely to result in a substantial lessening of competition," he wrote.

It's thought that this will open other telecommunication companies to pursue similar deals. It's expected that Comcast will be bidding for part of 21st Century Fox in a few days, causing a fight between Comcast and Disney who had already bid for the assets.

Forbes points out that AT&T currently just distributes content and doesn't create it, but once they start creating it, the news outlet believes it will bring about more choices and price competition, "just as Amazon Prime Video, Netflix, and Hulu did when they entered the streaming services market."

The thought is that once consumers have more choices, it will lead to lower prices overall. With AT&T now competing against network, cable, and streaming companies, many of them large conglomerates, such as Disney, NBC, Fox, etc., it will create more choices, which is obviously something their rivals are trying to avoid.

Looking at this and what has happened with streaming, it's believed that not only will consumers have more options for what to watch, but they'll have improved prices, or at least more options for the same price.

AT&T already acquired DirecTV in 2015. It's already given consumers choices just with that one smaller acquisition. No longer do they have to look at only the Uverse product for cable TV service. Now they have a choice of getting DirecTV with a dish or even the DirecTV Now streaming service. 

By acquiring the content producing area of the business, it's only going to provide more choices and more competitive prices for AT&T customers.

 

 

 

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