Home Economic Trends Watchdog Slams AT&T’s Latest Mega-Merger Three Years After ‘Disastrous’ Time Warner Acquisition...

Watchdog Slams AT&T’s Latest Mega-Merger Three Years After ‘Disastrous’ Time Warner Acquisition Cost 45,000 Jobs – Julia Conley (05/21/2021)

By
wsw staff
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Public interest group Common Cause was among the critics denouncing telecom giant AT&T’s latest merger on Monday as the company announced it had reached a $43 billion deal to consolidate the media company Discovery with WarnerMedia.

The deal is expected to be finalized in mid-2022 and will combine cable networks including CNN and HBO with Discovery’s channels including HGTV and The Food Network as AT&T aims to compete with streaming services like Netflix.

“As usual the only folks who’ll pay any real penalty for AT&T’s expensive strategy incompetence will be its consumers and lower level employees.” 
—Karl Bode, journalist

The agreement comes three years after AT&T spent $85 billion to acquire the former media giant Time Warner and form WarnerMedia, a deal which drew skepticism from media experts and which AT&T spent millions of dollars and several months defending from challenges by government regulators.  

The New York Times reported Monday that the decision to unwind the acquisition of Time Warner indicated “a failed acquisition strategy,” and Common Cause accused AT&T of “seeking a bailout from a merger that should have never been approved.”

“The AT&T/Time Warner merger has proven to be as disastrous as many of us predicted,” said Michael Copps, special adviser to Common Cause and a former FCC commissioner. “After three years, millions of dollars of debt, and waves of layoffs, the deal has not only failed the public interest test but has not made any business sense either.”

Since the Time Warner acquisition three years ago, AT&T has laid off about 45,000 workers. The company claimed it planned to create 7,000 new jobs as a result of former President Donald Trump’s corporate tax cuts, which saved AT&T $42 billion, but it continued cutting jobs even after receiving the tax break, according to Ars Technica.

A report commissioned by California officials also found that AT&T allowed its copper phone networks in low-income areas to deteriorate in recent years even as it raised its prices by 152.6% over 12 years.

“While the deal is being touted as good for ‘scale,’ it will undoubtedly cost worker jobs, billions more in company debt, and consumer harms,” said Copps of Monday’s announcement. “The merger does not even begin to register on the scale of the public interest.”

Tech journalist Karl Bode slammed the corporate media for its focus on the amount of money Discovery and AT&T shareholders stand to make from the deal, with little mention of the workers who will likely face job losses and the consumers who will likely be confronted with higher prices as a result of the merger.

“As usual the only folks who’ll pay any real penalty for AT&T’s expensive strategy incompetence will be its consumers and lower level employees,” Bode said.

Sen. Richard Blumenthal (D-Conn.) spoke out about the merger, calling for regulators’ “close scrutiny to protect consumers’ pocket books instead of accelerating further concentration among corporate behemoths.”

“Recent lax antitrust enforcement has allowed a dramatic consolidation in the media market that is driving up prices and limiting consumer choice,” said Blumenthal. “I expect that antitrust enforcers will fully and fairly review this deal to protect consumers’ interests.”

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