After weeks of rumors, the Trump administration has confirmed that it will be filing a lawsuit to stop the proposed AT&T merger with Time Warner. The stated concern: The combined company would give AT&T the power to make rival distributors pay significantly higher fees than they do presently to distribute its content.
As Makan Delrahim, the Justice Department’s head of anti-trust efforts put it, “It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy.”
But there is some grounds for asking whether the Trump administration actions have a lot more to to with President Trump’s dislike of CNN than with a supposed concern about monopolies.
The backstory: The AT&T Time Warner merger was announced late last year and appeared to be sailing through the federal regulatory process. Then a few weeks ago, word got out that the Justice Department was demanding the sale of CNN as part of the approval process.
Now it’s no secret that Trump frequently criticizes CNN for what he perceives as negative coverage of him and his administration. So any number of observers, not to mention AT&T, got suspicious at Trump’s conversion to the anti-monopoly cause. “The only reason you would divest CNN would be to kowtow to the president because he doesn’t like the coverage,” one source close to the negotiations between the parties and the Justice Department told Politico.
Now, just because one is suspicious of Trump’s motives here doesn’t necessarily mean one has to support the AT&T-Time Warner merger. As Matt Stoller, a fellow at the Open Markets Institute, told me earlier this month, “We should be wary of the AT&T merger. We should also be wary of Trump’s potential abuse of power.”
Indeed, there are solid grounds for those who are suspicious of this sort of corporate concentration in the communications sector to doubt Trump’s commitment to fighting this concentration in a broader sense. That’s because, if the Trump administration were truly concerned about the negative impact of this consolidation, there are plenty of other opportunities to take action.
The Trump administration’s handling of these other opportunities strongly suggests that Trump and his appointees don’t harbor a serious concern about the impact of media consolidation on the American public.
Take net neutrality. Net neutrality rules mandate that providers like AT&T and Comcast need to treat all content equally. That means they can’t, for example, offer their own or other favored content at higher speeds, while making others, like competitors such as Amazon or Netflix — or smaller companies that don’t want to pay up — stream more slowly.
The FCC began signaling interest in a repeal of net neutrality rules earlier this year. And then Tuesday — that’s Tuesday, as in today — Federal Communications Commission Chair Ajit Pai (appointed chair by Trump!) announced that the FCC will vote on a repeal of the Obama administration’s net neutrality regulations in December. “Under my proposal, the federal government will stop micromanaging the internet,” Pai declared. He added that he hasn’t discussed his plans with the White House.
So where is Trump on this matter? Well, last spring the White House let it be known that it wanted to see the Obama era net neutrality rules reversed, citing them as an example of too much regulation strangling innovation. According to then-Trump administration press secretary Sean Spicer, net neutrality was an example of “bureaucrats in Washington” who are “picking winners and losers.” No, this didn’t make sense to me either. Net neutrality is about making sure the carriers can’t play favorites.
Then there is the proposed merger between Sinclair Broadcasting Group and Tribune Media. If approved, the newly combined company will be able to access 70 percent of the television viewing market. The current limit is 39 percent. Under current regulations, the newly combined company would need to sell off a lot of stations in order to receive approval.
It’s worth noting that Sinclair Broadcasting is a notoriously conservative-leaning network and frequently demands its stations run right-leaning segments. The state attorneys general of Maryland, Rhode Island, Massachusetts and Illinois have already said they are opposed to this potential corporate behemoth, saying, among other things, it would “reduce consumer choices, and threaten the diversity of voices in media.”
The matter is currently under review at the FCC. There’s no word on how the commission will rule yet, at least not in the strict sense of these sorts of things. There is no reason to suspect Trump is weighing in on this at all, and it is possible the AT&T lawsuit indicates that the FCC, like the Justice Department, will be taking a harder line on these sorts of things going forward. But last week, the FCC voted to repeal a number of decades-old regulations banning a company from owning a newspaper and television station in the same media market without receiving a waiver. It also changed the rules so a company can own more stations in the same market.
Meanwhile, Bloomberg reported today that Pai is examining the regulations limiting what percentage of the American market any one individual broadcaster can reach. That potentially means that Sinclair will need to sell off a lot fewer television stations for the deal to be approved than it would under current regulations.
It’s hard to avoid noticing that even as the Justice Department is attempting to stop one major media merger, the FCC is undertaking policies that would make them easier elsewhere, all but clearing the regulatory runway so outfits such as Sinclair meet the conditions for approval in an easier fashion.
Ending net neutrality will almost certainly cut into the voices and outlets that are easily accessible by consumers, leading them to corporate-behemoth-favored sources of information and entertainment. The Sinclair Tribune merger would have a similar impact on television markets, with the added twist that it would favor conservative voices.
The opposition to the AT&T-Time Warner merger is all well and good. But if Trump and his appointees are truly concerned about the impact of media consolidation on Americans, they’ve sure got a funny way of showing it.