osewalrus

The big argument in whether AT&T should be allowed to buy Time Warner was whether AT&T would seek to leverage this vertical integration to drive up costs to rivals by depriving them of valuable content and making that content exclusively available to itself. This is the classic "buying your way to monopoly through vertical integration." Under current antitrust law, nothing stops you from competing in the programing market and distribution market simultaneously (this is why it took the Cable Act of 1992 to make programming available to rivals). But buying a supplier to your rivals and then foreclosing them from getting the product they need to compete effectively is supposed to be what even the U of C types would say antitrust is about.

AT&T claimed that it would be crazy for them to forgo the revenue from leasing out TW programming to as many outlets as possible. That's how TW makes money. Sure, said the government, that was how TW made money before they merged with a distribution system. But once they are vertically integrated, TW won't make decisions in the same way. The combined AT&T will maximize revenue to the combined AT&T. So if AT&T thinks it can make more money overall withholding the content (or jacking up the rates so that rivals can't effectively compete on price), then it will do so even if the TW unit loses revenue. From the standpoint of vertically integrated AT&T/TW, this is no different then spending money on spectrum for 5G.

Judge Leon, the Judge who approved the AT&T/TW deal, not only sided with AT&T/TW -- he was quite obnoxiously arrogant about it. This is not uncommon among the federalist society set who think that membership in the federalist society makes them econ experts in the same way some SCAdians think that paying dues to SCA, Inc. makes them Ph.Ds in medieval history.

And, as demonstrated by this article, they are usually spectacularly wrong. https://arstechnica.com/information-technology/2020/02/att-lost-1-2b-by-preventing-time-warner-shows-from-airing-on-netflix/?utm_brand=arstechnica&utm_source=twitter&utm_social-type=owned&utm_medium=social

As an aside, this highlights how critically important SEC reporting is, and why enforcement is so important. I forces companies to actually say the quiet part out loud.