After months of discussion, AT&T-Time Warner Merger officially received the final decision from the court.
In the wake of net neutrality fight, a federal judge has just granted AT&T its most wanted wish. It can now acquire Time Warner with its $85 billion deal which is a big victory for the firms but a huge loss for consumers. According to the transaction which closed yesterday, a single entity would have extensive control over distribution and programming.
Shareholders of Time Warner are qualified to receive 1.4 shares of AT&T common stock and $53.75 cash for every share held by the company. TWX will soon have its name changed seeing that its shares jumped after the announcement while the shares of AT&T weakened.
Time Warner operates in three divisions. Turner establishes branded news, kids multi-platform content and entertainment while running 175 TV channels worldwide; Home Box Office (HBO) owns and runs the HBO and Cinemax multichannel premium pay TV services; and lastly, Warner Bros. studio which manages the distribution, production, and licensing of TV programming including feature films.
MoffettNathanson Research analysts say that the overall number of pay-TV subscribers declined to 3.4% in the last quarter of 2017. But it still is higher in contrast to 2016 where subscription plummeted to 2% and in 2015 with a drop of 1%.
U.S. District Court for the District of Columbia, Judge Richard Leon saw that Facebook, Netflix and other digital entities offer decent competition. However, he disregarded that those entities reach consumers over somewhat limited common distribution networks. It means that the merger will enable one of the major networks to favor its own content. It is specifically notable since the judge did not encompass any provisions that necessitate low-cost access to that network for adversaries.
The clearance for the AT&T-Time Warner merger has gotten consumers more worried because it threatens net neutrality. The decision was finalized just in time that the open internet has been repealed. The agreement will have unprecedented market authority to govern access to the internet for content as well as for consumers who watch it.
According to Recode’s Peter Kafka, anyone who thinks that if merging of media will be allowed, concludes that they can push for it and purchase whatever they want.
The approval of AT&T-Time Warner merger is a sign that more company mergers will be approved in the coming month or years. It is worth noting that Comcast also joined the bandwagon of the merger when it offered to acquire 21st Century Fox for $65 billion in cash.
“America is getting crushed by big, unresponsive, powerful corporate monopolies, the modern version of the trusts of the gilded age. This isn’t happening organically but through mergers… These mergers hurt everyone except for the CEOs and the investors who make money off of monopolistic prices,” New York attorney general candidate Zephyr Teachout wrote in an op-ed.
Whatever kind of media merging happens, Decenternet will stay loyal to its Internet users. Consumers can still enjoy the open internet, and net neutrality protects and empowers free speech. Users do not need to pay more just to access any websites to watch what they want. People still have a choice in the platform where they can exercise their rights to communicate freely online.