There is no doubt that AT&T needs the Time Warner deal...badly. Their land-based distribution network, which is dependent on old copper telephone lines, is far inferior to their cable competitors which have since installed coaxial or fiber lines that supply far faster internet speeds to data-hungry homes and businesses.
Of course, just a few years ago, AT&T attempted to 'solve' their copper network problem by ignoring the value of land-based networks altogether and instead buying a satellite TV business, DirecTV, for $67 billion. Predictably, that decision has been a total disaster as DirecTV has done nothing but shed hundreds of thousands of subscribers ever since...something AT&T management should have been able to predict if they didn't discredit the growing value of streaming services...a necessary oversight for a company with an inferior network.
Value - Distribution - AT - T - Mergers
Now, rather than ignore the value of distribution, AT&T has apparently decided to pursue mergers that allow them to control content...content which the DOJ feels could be held hostage to make their inferior network somewhat more attractive to customers thus stemming the tide of subscriber losses for AT&T.
Of course, as we noted yesterday, an incredulous AT&T vowed that it's not possible for a vertical merger to put customers at a disadvantage, as the DOJ has alleged with their anti-trust lawsuit. Per Axios:
Mergers - Companies - Industries - AT - T
"Vertical" mergers that combine companies in two different industries (AT&T is considered a telecom company and Time Warner is a content provider) are seen as less of an antitrust threat than "horizontal" mergers that combine two competing companies (such as AT&T's unsuccessful attempt to purchase T-Mobile).
Before joining the administration, DoJ Antitrust chief Makan Delrahim had said he didn't see problems with the proposed merger. He also said at his confirmation hearing that he would not allow political interference in merger reviews.
Deal - Comcast
In a similarly structured deal, Comcast was allowed...
Wake Up To Breaking News!