For Immediate Release
Contact: Ted Hearn
PITTSBURGH, June 13, 2018 – American Cable Association President and CEO Matthew M. Polka issued the following statement based on the written order by the Court in favor of AT&T-Time Warner:
“The American Cable Association is disappointed that the Court did not block the AT&T-Time Warner merger or did not enhance the commercial arbitration offer made by AT&T/Time Warner (the Turner Offer), which did not apply to HBO and had procedures skewed against rivals. The Court’s decision runs counter to numerous findings over the past 15 years by the Federal Communications Commission and the Department of Justice that vertical combinations between video programmers and distributors require robust conditions to constrain the incentive and ability of the combined firm to raise prices to rivals and reduce choice. For these reasons, the Court’s opinion is out of the mainstream.
“If there is any saving grace in the Court’s opinion, it is that the Court recognized that the offer made by AT&T-Time Warner (via Turner Broadcasting) to agree to commercial arbitration to settle program access disputes ‘will have real-world effects,’ helping to prevent ‘new’ AT&T from raising prices to its rivals. Of course, as ACA demonstrated, the Turner Offer is flawed in a number of ways. ACA also faults the Court for believing the FCC’s program access rules are an effective remedy against the harms a vertically integrated firm can inflict by raising prices to rivals, especially smaller distributors. ACA informed the Court about problems smaller distributors have in invoking these rules, including because their buying group is effectively excluded for using them, but the Court failed to acknowledge these shortcomings.
“The Court may have found that DOJ failed to meet its burden of proof in the AT&T-Time Warner case, but that is one case, with one set of facts. The DOJ and FCC should continue to rigorously review existing and proposed vertical combinations and impose sufficient remedies to offset their harms.
“Most importantly, the DOJ and FCC need to examine the harms that have flowed and will continue to flow from the Comcast-NBCU combination, which has a larger share of the markets it serves and controls more essential programming in these markets, including regional sports networks and local broadcast stations. In light of the existence of the Turner Offer, the agencies should constrain the firm’s behavior, at least by imposing that same requirement on the Comcast-NBCU combination. The agencies also should prevent Comcast-NBCU from acquiring any additional firms, such as Fox, which would only increase its ability to harm consumer welfare.”
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing about 800 smaller and medium-sized, independent companies that provide broadband, phone and video services to nearly 8 million customers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA’s members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit https://acaconnects.org/.