AT&T Has Finally Acquired Time Warner – Now What?
In spite of the misgivings of the United States Department of Justice, a Federal judge approved the AT&T acquisition of Time Warner Tuesday
In spite of the misgivings of the United States Department of Justice, a Federal judge approved the AT&T acquisition of Time Warner on Tuesday. The deal was finalized on Thursday amidst talk of an appeal by the Department of Justice, who initially denied the acquisition due to antitrust issues. The source of their concern hinged on the power that AT&T would be able to wield over competitors who also depended on Time Warner for content.
The merger will allow one of the world’s largest and most successful telecommunications giants to absorb the entertainment powerhouse that is Time Warner. This gives AT&T access to everything from studios to entire networks and all of the assets in between. The company has vowed to refrain from raising the prices on Time Warner’s material in an effort to dispel the rumors of potential gouging and an industry monopoly.
Judge Richard Leon approved the acquisition, citing AT&T’s argument that it was necessary in order for the company to compete with up and coming streaming services and cord cutting trends. Traditional cable networks have experienced huge financial losses due to the cheaper and more customizable alternatives offered by online television and companies like Netflix, Amazon, and Hulu. This has led to mergers worth tens of billions of dollars between entertainment networks striving to stave off the rising tide of cord cutting options.
There are rumors that the Department of Justice will make a move to appeal the decision, creating an uncertain business model for the new behemoth. If an appeal is made, then the argument with more than likely be placed before a three-judge panel in order to reach a final decision.
In the meantime, cord cutters can expect to see at least one new streaming service on the market. AT&T Watch is set to debut in the near future as one of the many cost-cutting options dangled in front of the Department of Justice to convince them of the acquisition’s benefits. The new $15 streaming service will offer a basic content lineup devoid of sports and additional bells and whistles.
According to Techhive, this new alliance will allow AT&T to offer even more cheap premium options for subscribers, but new concerns have arisen with the official end of net neutrality. Consumers and industry insiders fear that the internet will become a technological toll road that can be metered by those who have the money to control it.
Only time and the slow wheels of the justice system will determine the outcome of this scenario. In the meantime, cord cutters should try to reap whatever benefits they can from the acquisition and expect to see an uptick in available services.
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