HBO Now May Not Survive AT&T-Time Warner Merger, Lawmaker Warns

Last year, Time Warner unveiled HBO Now, a long-awaited service that lets people pay a monthly fee to stream programs like "Game of Thrones" and "Girls" without also purchasing a pricey cable video package.

But now, the popular stand-alone streaming service could be endangered by AT&T's planned $85 billion merger with Time Warner. That's according to Sen. Al Franken (D-Minnesota), who is voicing concerns about the deal.

He says the merger "would create a mega media conglomerate with both the incentive and ability to use its platform to harm consumers and competitors alike."

AT&T "could promote its own programming ... or restrict other distributors' ability to offer its highly-desired content," Franken writes in a letter to the Federal Communications Commission and Department of Justice. "Innovative offerings like HBO's internet streaming service could be jeopardized entirely, or made available on different and discriminatory terms to broadband customers of companies other than AT&T," he adds.



Franken also questions whether regulators can successfully impose the kinds of conditions that would limit those threats -- especially given that merger conditions haven't always been followed in the past.

The lawmaker points to Comcast, which has been accused of violating several of the conditions of its 2011 merger with NBC Universal. For instance, in 2012 the FCC fined Comcast $800,000 for allegedly failing to comply with a condition requiring it to offer reasonably priced stand-alone broadband service.

Comcast also has come under fire over terms of its new video service Stream TV, which lets cord cutters access many of the same programs as its cable customers, including all broadcast channels and HBO. The idea of a stand-alone streaming service isn't controversial. But Comcast isn't counting material viewed through Stream against customers' data caps.

Advocates alleged in a recent petition to the FCC that data-cap exemption for Stream violates net neutrality principles as well as the conditions of Comcast's merger with NBC. (For its part, Comcast says Stream is a "cable" service, not subject to net neutrality rules.)

"As as result of Comcast's questionable compliance with its merger order, I am doubtful that any behavioral conditions in a context such as this one could be structured with sufficient precision to prevent all competitive harms," Franken writes.

He urges regulators to subject AT&T's proposed acquisition to "the highest scrutiny."

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