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Public Knowledge to Hill: AT&T/DirecTV Should Be Blocked - Broadcasting & Cable

Public Knowledge to Hill: AT&T/DirecTV Should Be Blocked

Says public interest benefits are thin, and don't outweigh 'harm' to competition
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John Bergmayer, senior staff attorney at Public Knowledge, says AT&T's proposed merger with DirecTV will reduce competition and hurt the public, and should be disallowed.

In prepared testimony for a House antitrust subcommittee hearing on the proposed mergers, Bergmayer warns policymakers against succumbing to "merger fatigue" after talks of a Sprint/T-Mobile merger and the proposed Comcast/Time Warner Cable deal.

"[D]uring this time of industry consolidation, policymakers must ensure they pay close attention to the specifics of each new deal as it is announced," he says.

"AT&T has failed to make its case that this merger would not harm competition," he says. "The proposed merger would remove a pay TV competitor from many local TV markets—a direct competitive harm. Yet it offers only to do some limited price-matching for three years to ameliorate this. Temporary, limited relief such as this cannot overcome the harm to consumers."

He also says AT&T's public interest promises are not all they are cracked up to be, nor is its record in delivering on the promises it makes. For one thing, says Bergmayer, it is unclear how much of its promised planned network upgrades would have been made regardless. He says the telco "has a habit of 'promising' its existing business plans as merger commitments."

He also points to a lack of specificity on how AT&T's claimed cost savings through the deal will translate to price benefits for its customers.

"The burden is on AT&T to show that this merger would not harm competition," he says. "It has not done so....AT&T, a pay TV company, wants to remove DirecTV, another pay TV company, from the marketplace. This is a classic horizontal merger, and it would harm consumers."

He calls AT&T's public interest benefit arguments "thin," and says its pledge is to adhere to FCC network neutrality rules means abiding by rules that mostly don’t apply to wireless broadband anyway.

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