AT&T's proposed $85 billion merger with Time Warner could enable the company to "utterly dominate" the video distribution market, a coalition of advocacy groups warns in a letter to Attorney General Jeff Sessions.
"AT&T has the reach to serve as the internet access provider and video distributor for nearly every person in the United States," Public Knowledge, Free Press, Consumer Federation of America and 11 other organizations write in a letter sent to the DOJ on Wednesday. "Buying Time Warner would incentivize and enable AT&T to cement its dominance and benefit itself, at the expense of pro-consumer competition in the video distribution market."
Among other arguments, the advocates say that AT&T could favor its own over-the-top video services -- such as by excluding its video from consumers' data caps, or prioritizing streams of its video. (Current net neutrality rules appear to prohibit that kind of prioritization, but Federal Communications Commission Chairman Ajit Pai recently proposed gutting those rules.)
"These discriminatory actions could allow AT&T to utterly dominate this new market, depriving consumers of choice while raising costs," the groups write.
The advocates also argue that after the merger, AT&T "would be able to use information from both sides of the negotiating table to give itself better deals than its rivals can obtain."
They add: "It would necessarily know, for instance, what its programming rivals are charging for their content, and what its distribution rivals are paying."
The letter from watchdogs comes several weeks after a group of senators also argued in a letter to the DOJ that the deal will lead to "higher prices, fewer choices, and worse service for consumers."
AT&T may be planning to address some of those concerns by managing the telecom and DirecTV business separately from the media business, according to a report Friday in Bloomberg.
But that move won't necessarily alleviate the potential problems with the merger, according to John Bergmayer, senior counsel at Public Knowledge. "That doesn't change our analysis," he says, adding that the group hasn't yet seen any details about how AT&T might operate its divisions.
"Lots of businesses have internal divisions," he says. "That doesn't mean businesses don't have some means of sharing information when necessary."