NEW YORK (Reuters Breakingviews) - President Donald Trump’s administration is scrambling media signals. The Department of Justice on Monday sued to block AT&T’s merger with Time Warner over concerns the two will use content to stiff rivals. But another agency intends to scrap rules that force internet providers to treat web traffic equally.
Trying to stop AT&T’s $85 billion offer for HBO’s parent is an unusual move in itself. The success of M&A transactions based on a similar vertical structure, such as Comcast’s acquisition of NBC Universal, certainly left executives at the two companies convinced that their deal would sail through. A Republican-led White House and Congress ought to have bolstered their chances too, as the GOP usually champions looser rules that favor business.
In its complaint, the DOJ cited fears that AT&T could use its ownership of series like “Game of Thrones” and sports rights to, say, NBA games to force other distributors to pay more to carry the content. Any rival that balked at ponying up, for example, could lose access to the programming; AT&T might then screen it exclusively over its own network in the hope of signing up more customers as a result.
By contrast, the Federal Communications Commission is in the process of dismantling regulation known as net neutrality that prevents providers – like AT&T – from throttling the traffic of other programmers. The $200 billion telecom company and others like it could give its own TV shows and movies priority over other content. FCC Chairman Ajit Pai, who earlier remarked he planned to take a weed whacker to previous statutes, is also lifting a ban on cross-ownership of a newspaper and TV stations in the same market and making it easier for broadcasters to gobble up peers.
The Trump administration and tight coordination of policy are hardly synonymous. So it’s not surprising that watchdogs are roaming all over the field. It stands in contrast to President Barack Obama’s tenure where the FCC and the DOJ looked to the same lodestar for guidance on competition. The commission ushered in net neutrality rules that played a part in the Justice Department’s harsh view of Comcast’s proposed merger with Time Warner Cable. Under Trump, though, the confused approach makes for a blurry regulatory picture.
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