Giants gobbling up giants – AT&T acquiring Time Warner

by Paul Slack
  |  October 24, 2016  |  
October 24, 2016

AT&T You may already know that AT&T is ready to purchase Time Warner –  but you probably let it go in one ear and right back out the other.  Someone is always gobbling up someone else right?  This time – you need to pay attention.  For better or worse, this marriage may have an impact on you.

Over the past decade or so – most communication and media companies have acquired, been acquired by or merged with another company….to the point where there are now only five (yes FIVE) media corporations that control nearly all of the information you get – one of those five is Time Warner.

The U.S. communication market has experienced similar conglomeration and is now dominated by two large and two smaller companies.  One of the top two is AT&T – also, the biggest global communications company.  It wasn’t good enough for AT&T – who was forced to start over after the anti-trust bust-up of Bell Telephone in the 1980’s – to dominate the digital communications market, with a Time Warner purchase, they become one of the media and entertainment power players.  The $84.5 billion deal has raised eyebrows from Wall Street to the Department of Justice and the FCC, both because of the sheer size of the deal but also because of the power that AT&T will weld.

AT&T also provides internet access and last year, acquired Directv.  They tons of information on their customer’s habits.  They know what kind of tech buyer you are (did you pay full price for the last iPhone the day after it came out?), how much data you use, what you watch on TV, who, when and how long – and even “why” about your smartphone use.  When AT&T’s internet service network was upgraded, they did get some backwash over new tracking mechanisms which can’t really be turned off.  Basically, people have come to expect that they will be tracked by Google and Facebook and that they will get tailored ads – but not their internet provider.

Times Change

Time Warner – who owns Turner Broadcasting, HBO, the CW – and CNN, provides cable service to millions of people, a 10% stake in HULU, and just so happens to offer bundling with internet and phone – also has that information about their customers.  Consumers may be worried about their bill going up or service changes.  Wall Street is looking because of the size of the deal and its effect on stock.  Government agencies are taking a look at the potential for manipulation of information access – and whether this large of a deal is a potential “monopoly” issue.

It isn’t all that hard to picture a situation where Time Warner’s content and channels could be “prioritized” on Directv and through AT&T digital service.  CNN broadcasts might be allowed to flow unfettered – while other news programming could be jammed up – or how content could be squeezed for non-AT&T customers.  AT&T isn’t the only company presenting this looming threat and theoretically, “net neutrality” regulations will prevent manipulation of the flow of information and media.

No one has complained about Comcast’s control of NBC (at least not that much)….but AT&T’s reach is already farther – with the mobile market.  Even without breaking “net neutrality” – they could promote their own content by the way they bill for data.  Simply not counting Time Warner programming as part of the monthly plan – while counting everything else.  As in – you can use your Hulu subscription for free – but not Netflix.

The Time Warner deal isn’t a sure thing.  AT&T can’t seem to stay out of “monopoly jail” and their attempt at acquisition of T-mobile was blocked a few years back. No matter what – it is worth a close watch.

Read about the mashup of AT&T and Time Warner at Mashable.

 What’s the point?

About a third of the millennials only access the internet over a smart device and another third do so, most of the time.  Theoretically, AT&T “can” control information access to everything for those customers – and anyone who “bundles” their services.

Realistically – they probably won’t do anything that is suspect – at least in an obvious way.  They have been forced to dissolve and sell-off once…. but then they also quietly went about purchasing all of those little companies which had grown into that space.  Though the signal has changed from landline to wireless, this acquisition could give them just about as much power as they had.

Even if they behave and don’t use any of that power – they will have become one of the biggest sources of data about consumers.  Communication at home, away, internet use of any kind, entertainment, location, travel, purchases…maybe even more information as (gasp) Google and Facebook.

This deal would also take some of the air out of Verizon’s balloon.  They are seriously hoping to become a major player in the digital advertising space with their purchase of AOL and then Yahoo and part of the plan was the information boost they got from both AOL and Yahoo.  That deal also faced scrutiny for potential manipulation of consumer data – and still is – but that seems like “no big deal” in comparison to this.

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