Market Overview

AT&T-Time Warner Merger Deserves 'Very Rigorous' Scrutiny: Senator


Sen. Richard Blumenthal (D-Conn.) believes the proposed AT&T Inc. (NYSE: T)-Time Warner Inc (NYSE: TWX) merger will be very carefully reviewed by the anti-trust sub-committee of the Judiciary Committee and an Federal Communication Committee review.

Blumenthal will be involved in the process himself as a ranking member within the anti-trust sub-committee. Speaking as a guest on CNBC, he said the merger "raises alarm bells" because it's a vertical integration with potential impact to severely constrain competitors and harm consumers.

"The danger is that a company like AT&T, if merged with Time Warner, could leverage content to restrict distribution by other competitors," he said. "There are very very serious questions here that have to be answered about potential impact on competition and consumers from this gargantuan merger."

Comcast-NBC Merger Totally Different

Blumenthal noted the AT&T-Time Warner merger is completely different from Comcast Corporation's (NASDAQ: CMCSA) acquisition of NBC.

For starters, the Comcast-NBC merger only involved one platform in the form TV while the proposed AT&T and Time Warner merger extends way beyond just TV.

"These mergers are always justified by potential promises of benefits," he concluded. "I've heard that potential of promise before, we have all heard it on the airline mergers [which were] not really all that beneficial for consumers. A lot of those promises have proven to be unfounded."

Despite the Senator's cautious commentary, at least one of Time Warner's main competitor isn't worried. Netflix, Inc. (NASDAQ: NFLX) CEO Reed Hastings acknowledged he is in favor of a competition which would result in heightened competition and the consumer will end up being a winner.

Posted-In: AT&T Time Warner Merger CNBC CNBC Mergers Reed Hastings Richard BlumenthalMedia


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