Proposed merger of AT&T and Comcast Cable would likely have impac...
Proposed merger of AT&T and Comcast Cable would likely have impact on “competitive terrain,” Senate Judiciary Antitrust Subcommittee Chmn. Kohl (D-Wis.) and ranking Republican DeWine (O.) said in letter to FCC Chmn. Michael Powell and Justice Dept. antitrust chief…
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Charles James. Letter outlines “concerns” the senators have with merger, but doesn’t say DoJ or FCC should reject merger. While merger doesn’t seem to raise traditional antitrust issues related to geography overlap of services, it does involve other questions about “competitive effects of this complex merger” on issues such as content diversity, set-top boxes and Internet market, letter said. Company as sizable as AT&T- Comcast could affect diversity of programming and content, letter said. If deal is approved, 3 largest cable companies would control 65% of cable market, letter said. “Such a concentrated market raises the concern that a small number of cable companies can act as a ‘gatekeeper,’ i.e., that a programmer would be unable to successfully market its product without the approval of one or two large companies,” letter said. Such situation would pose threat to innovation and diversity in both news and entertainment, letter said. Senators urged careful investigation of content issues. Also, market share of merged company could affect market for set-top boxes, letter said, adding that Telecom Act of 1996 has yet to produce competitive market in this area. “We trust that if allowed to merge, AT&T-Comcast would lead industry efforts to encourage a truly competitive market” for set-top boxes, letter said. Merged AT&T-Comcast Cable could have ramifications on Internet content market, letter said: “For example, the law does not prohibit cable companies from blocking access to Web sites or charging individual Web sites a fee before allowing consumers access to them, and we have heard allegations that such conduct is occurring in certain markets.” Comcast has said it hasn’t used such tactics, letter said, but it was important that Comcast continue to avoid anticompetitive behavior. Size of merged company also would affect broadband market, letter said, and AT&T-Comcast already had begun arranging for additional ISP choices on their joined system. “We believe that more progress in this area is necessary to promote long-term competition in this market,” letter said. Letter followed a Sept. 19 hearing before the Antitrust Subcommittee at which James updated Kohl and DeWine on the merger (CD Sept 20 p7). Both panel members expressed concern about the continuing consolidation of media outlets.