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/QPFC[(TKFC[COsRO26 Leon said it would be
counter-productive for a
merged AT&T-Time Warn-
er to withhold its own chan-
nels from competing pay-
TV providers or black out
competitors’ channels, and
thus the likelihood of this
happening was low.
“The evidence of his
being wrong is bordering on
the absurd,” said Christo-
pher Sagers, a professor at
the Cleveland-Marshall
College of Law.
Mark Lemley, a law pro-
fessor at Stanford Uni-
versity, said having the
same company produce and
deliver content “leads to lots
of problems.”
“We’d be better off if you
got your internet and cable
access from one company,
and could choose what
content you wanted from
independent content pro-
viders,” he said.
AT&T withdrew its HBO
and Cinemax channels from
Dish, as well as Dish’s Sling
TV streaming service, last
November after the two
companies failed to agree on
financial terms for a new
contract.
“Plain and simple, the
merger created for AT&T
immense power over con-
sumers,” Andy LeCuyer,Dish’s senior vice president
of programming, said in a
statement.
“AT&T no longer has
incentive to come to an
agreement on behalf of
consumer choice,” he said.
“Instead, it’s been given the
power to grab more money
or steal away customers.”CBS channels went dark
on AT&T’s pay-TV services
last month after AT&T,
while demanding more
money from Dish, com-
plained that CBS was seek-
ing “unprecedented in-
creases” in programming
fees.
“CBS appears intent on
delaying negotiations until
the risk of consumer harm is
greater,” Thomas Tyrer, an
AT&T spokesman, said in a
statement without any
sense of irony. “They want to
raise prices and limit con-
sumer choice at a time when
customers have made it
crystal clear they demand
the opposite.”
He declined to comment
on the dispute between
AT&T and Dish. But HBO
said when the blackout
began in November that
Dish “is making it extremely
difficult, responding to our
good-faith attempts with
unreasonable terms.”
Einer Elhauge, a profes-sor at Harvard Law School,
said the current circum-
stances “seem to be pre-
cisely what the Department
of Justice predicted would
happen after the merger of
AT&T and Time Warner,
and precisely what AT&T
successfully persuaded the
trial court was implausible
for it to ever do post-
merger.”
His verdict? “It looks like
the court just got it wrong.”
If so, what if anything
can be done?
There was once a time
when regulators decided
AT&T had too much power
over the phone industry and
decided to break up the
company.
I wonder if the same case
now can be made for
AT&T’s power over the TV
industry.
And not just AT&T.
There’s also Comcast,
which, along with being the
country’s largest cable
operator, owns NBCUniver-sal and all the programming
resources of a major movie
studio and TV networks.
The antitrust experts I
spoke with said AT&T’s
post-merger behavior
makes a strong case for
separating pay-TV and
programming companies —
but it may be too late to fix
the problem.
“After a merger has gone
through, it is extremely
difficult to undo,” said
Michael Carrier, a professor
at Rutgers Law School.
He’s right. But that
doesn’t mean a lawsuit or
legislation should be off the
table.
When a single corpora-
tion controls both content
and distribution, it can
negotiate from a position of
unmatched strength and all
but dictate terms to com-
petitors.
Imagine if Disney —
owner of its namesake con-
tent brand, as well as ABC,
20th Century Fox, Pixar,
Marvel and “Star Wars” —
acquired Charter Commu-
nications’ Spectrum cable
service, the dominant pay-
TV service in Southern
California. Who could pos-
sibly compete?
(Full disclosure: The Los
Angeles Times partners
with Spectrum on a nightly
cable show.)
As it happens, AT&T’s
self-serving behavior may
be sufficient to keep other
companies’ merger ambi-
tions in check.
The experts say AT&T
has given federal officials
and consumer advocates
plenty of ammo for the next
time a major telecom com-
pany and a major media
company want to tie the
knot.
So get used to AT&T
playing rough. Its upcoming
HBO Max streaming serv-
ice is expected to be more
expensive than all rival
plans, perhaps costing as
much as $18 a month.
But don’t expect your
Spectrum cable technician
to show up wearing Mickey
Mouse ears any time soon.David Lazarus’ column runs
Tuesdays and Fridays.
[email protected]Deal gave AT&T too much pricing power
A FEDERALjudge last year said there was nothing
to fear from AT&T’s acquisition of Time Warner.Richard DrewAssociated Press[Lazarus,from C1]
U.S. stocks had their big-
gest loss of the year Monday,
and investors around the
world scrambled to sell, on
worries about how much
President Trump’s escalat-
ing trade war will damage
the global economy.
China let its currency, the
yuan, drop to its lowest level
against the dollar in more
than a decade, a move that
Trump railed against and
called “currency manipula-
tion.” It also halted pur-
chases of U.S. farm prod-
ucts. The moves follow
Trump’s tweets from last
week that threatened tariffs
on about $300 billion worth
of Chinese goods.
The trade war is rattling
investors who already were
unnerved by a slowing global
economy and falling U.S.
corporate profits.
The S&P 500 dropped
87.31 points, or 3%, to 2,844.74
on Monday. That was its big-
gest one-day loss since De-
cember. Earlier in the day it
was down as much as 3.7%.
The Dow Jones industrial
average slid 767.27 points, or
2.9%, to 25,717.74. The
Nasdaq composite sank
278.03 points, or 3.5%, to
7,726.04.
The sell-off began Mon-
day in Asia, where indexes
lost more than 1%, and inten-
sified as it swept westward.
Investors herded into U.S.
government bonds, which
sent yields down sharply.
The yield on the 10-year
Treasury note, which riseswith expectations of strong-
er economic growth and in-
flation, fell to its lowest level
since Trump’s 2016 election.
It fell to 1.72% from Friday’s
1.85%. The yield on the two-
year note, which is more in-
fluenced by interest-rate
moves from the Federal Re-
serve, sank to 1.58% from
1.71%.
A warning light of
recession in the bond mar-
ket also began shining more
brightly, which traders said
may have added to the sell-
ing pressure on stocks.
When short-term Treasury
yields are higher than long-
term rates, a rule of thumb
says a recession may arrive
in about a year. The three-
month yield was at 2.00% on
Monday afternoon, 0.28 of a
percentage point higherthan the 10-year’s yield. A
month ago it was 0.21 of a
point higher.
Of course, the U.S. econo-
my is still growing, the un-
employment rate remains
close to its healthiest level in
nearly half a century, and
U.S. stock indexes set record
highs just over a week ago.
But the escalating trade ten-
sions and investors’ disap-
pointment that the Federal
Reserve didn’t commit to a
lengthy series of interest-
rate cuts at its meeting last
week have sent the S&P 500
on a six-day losing streak, its
longest since October.Technology stocks bore
the brunt of Monday’s sell-
ing. Apple slid 5.2%.
Gold rose as investors
sought safer ground, ad-
vancing $19 to $1,464.60 an
ounce. Silver rose 13 cents to
$16.35 an ounce. Copper fell 3
cents to $2.54 a pound.
Benchmark U.S. crude
fell 97 cents to settle at $54.69
a barrel. Brent crude oil fell
$2.08 to $59.81 a barrel.
Wholesale gasoline fell 6
cents to $1.72 per gallon.
Heating oil declined 5 cents
to $1.84 per gallon. Natural
gas fell 5 cents to $2.07 per
1,000 cubic feet.Stocks suffer biggest loss
of 2019 on trade worries
Index
Dow industrials
S&P 500
Nasdaq composite
S&P 400
Russell 2000
EuroStoxx 50
Nikkei(Japan)
Hang Seng(Hong Kong)CloseDaily
changeDaily % YTD %25,717.74 -767.27 -2.90 +10.25
2,844.74 -87.31 -2.98 +13.48
7,726.04 -278.03 -3.47 +16.44
1,860.83 -53.70 -2.80 +11.89
1,487.41 -46.25 -3.02 +10.30
3,044.06 -68.74 -2.21 +10.29
20,720.29 -366.87 -1.74 +3.53
26,151.32 -767.26 -2.85 +1.29Major stock indexes
change changeSource: APassociated press
MARKET ROUNDUP