How would you like AT&T to control what you see when you log on to the Net,
or maybe having to use Excite if you want to search the web?
AT&T announced on Tuesday, May 6th that it had agreed to purchase the No. 3 cable
operator - MediaOne for $54 billion on the heels of its $48 billion acquisition of then
No. 2 cable company Tele-Communications. If these deals are approved by
government regulators, AT&T becomes the US's largest cable operator as well as
owning a large chunk of Time Warner the No. 2 cable operator. So what does all these
cable TV mega deals have to do with the net? Broadband, High Speed Access.
In the not too distant future most people will access the net, not with analog modems
but with high speed digital lines to set top boxes or to their PC's with cable modems.
Big business has been fighting it out to see who will supply the high speed pipes and
who will control you, the customer. It has been speculated that with this latest move
AT&T will control up to 50% of the households in the U.S. If this is not worrisome by
itself, Microsoft announced it would invest $5 billion in AT&T and in return AT&T would
increase it's use of Microsoft's Windows CE-based operating system software in its
digital set-top boxes.
So you've got Mega Corporation number 1 that was broken up by the
Justice Department 15 years ago because it was a monopoly and Mega Corporation
number 2 that is under investigation by the Justice Department for monopolistic
practices joining forces to create a giant media/internet alliance that has
already said that it wouldn't open its broadband cable lines to competing
Internet service providers. Raise any red flags for you yet.
If AT&T controls cable TV and Broadband Internet access will this give them too much power,
too much control over what we see and hear? Will it result in less
competitive services for telecomm and media? I think yes on both counts. AT&T has a large
stake in AtHome, which is in the process of acquiring the Excite search engine - think they'll
make it easy to use a competitor's search? Do you think the Netscape browser will get a fair
chance at being used by AT&T subscribers using the Windows CE set top box? I think no on
both counts.
I'm sure the government will give this deal a hard look before it is allowed to go through,
but as we have seen in the Microsoft v. DOJ it is very hard to prove monopolistic practices
and the burden would be even harder in this case since they have to prove it would be
a monopoly. I don't know if it would be a monopoly or not, I'm not a lawyer, but I do believe
that this deal would further limit competition and thus consumer choice. And that is not good.
