AT&T Promised Lower Prices After Time Warner Merger -- It's Raising Them Instead (arstechnica.com)

Less than a month after AT&T completed its $85 billion acquisition of Time Warner, the company is raising the base price of its DirecTV Now streaming service by $5 per month. This comes after promising in court that its acquisition would lover TV prices. Ars Technica reports: AT&T confirmed the price increase to Ars and said it began informing customers of the increase this past weekend. "The $5 increase will go into effect July 26 for new customers and varies for existing customers based on their billing date," an AT&T spokesperson said. The $5 increase will affect all DirecTV Now tiers except for a Spanish-language TV package, AT&T told Ars. That means the DirecTV Now packages that currently cost $35, $50, $60, and $70 a month will go up to $40, $55, $65, and $75. "To continue delivering the best possible streaming experience for both new and existing customers, we're bringing the cost of this service in line with the market -- which starts at a $40 price point," AT&T said.

In a court filing, trying to convince the Justice Department that its acquisition would be good for consumers, AT&T had this to say: "The evidence overwhelmingly showed that this merger is likely to enhance competition substantially, because it will enable the merged company to reduce prices, offer innovative video products, and compete more effectively against the increasingly powerful, vertically integrated 'FAANG' [Facebook, Apple, Amazon, Netflix, and Google] companies," AT&T told U.S. District Judge Richard Leon in the brief.

Comments

It can't be

[narcc]

I'm in total shock. Who could have possibly seen this coming?

Re: It can't be

[dinfinity]

Wrong. Free markets evolve towards consolidation and the only thing that prevents that is government regulation.

Do you think it is a coincidence that all mature markets are highly consolidated? The oligopolies you speak of are the (crappy) compromises of the free market desire for monopolies and the people's desires for perfect competition.

Another topic herein is the concept of 'cartel forming'. It's a dirty term, even for libertarians, yet it is utterly rational behavior from the perspective of the companies involved. In fact, in other areas of life, we would use words like 'alliance' and 'cooperation' to characterize the behavior. Buying up competing companies or trampling them is equally rational from the perspective of the companies and thus that is exactly what they will do, given the opportunity.

The takeaway here is that the concept of an unrestricted free market fundamentally stabilizes on a highly undesirable state of affairs from a societal point of view.

Now, having established that, finding a good way to deal with it is hard. Asking companies to 'take their responsibility', semirandomly blasting them with huge antitrust fines or breaking up companies above a certain size seem like terrible workarounds to me. One of the more creative ideas I've come across is taxing companies progressively based on their dominance in their respective market(s), but that too seems far from flawless.

Re: It can't be

[AmiMoJo]

Most countries solve this with "local loop unbundling". Basically the company that owns the phone lines and telephone exchanges has to offer access to other companies for the same price it charges itself. Other companies can install their own hardware at the local exchange (an ADSL DSLAM box) and offer internet service to anyone who wants it.

It's not perfect because the company that owns the lines tends to be really really shit at maintaining them, but at least you have a choice of ISPs.

Words Matter

[Anonymous Coward]

'enable to reduce' does not mean 'will reduce'. Stop reading what you want to see and instead read what's actually there.