The Trump administration is leading a double life when it comes to competition in the market for content that arrives via the internet.
The Department of Justice on Monday sued AT&T and Time Warner to block a proposed merger between the two that the government charges would lessen competition in violation of federal law.
The lawsuit upends a transaction that the companies announced a year ago, when AT&T agreed to pay about $85 billion for Time Warner, which owns CNN, HBO, Turner Sports and other networks.
DOJ contends that the deal, which is riding on regulatory approval, would set back competition and lead to higher prices for consumers.
A day later, the Federal Communications Commission voted to roll back rules that prevent cable companies and other internet service providers from blocking or slowing websites or social networks that do not pay for priority.
“We have one government, but two separate agencies with opposing views,” Spencer Kurn, an analyst at New Street Research, told the Times. “You’ve got one agency saying that marrying content and distribution results in too much market power, and another agency saying there’s no problem with a distributor favoring their content over someone else’s.”
Net neutrality, as the rules are known, prevents ISPs from prioritizing content from companies they own. The FCC chairman opposes the rules, saying they slow development of broadband networks by lessening the incentive of the companies that own them to add connections.
But the arguments advanced by DOJ in court seem to validate the concerns that net neutrality reflects. A combination of AT&T and Time Warner (the owner of CNN and HBO, among other networks) would give the combined company the ability to throttle programs that someone else owns, leading to higher prices for consumers, DOJ charges.
“After the merger, the merged company would have the power to make its video distributor rivals less competitive by raising their costs, resulting in even higher monthly bills for American families,” the government told the court.
That sounds like a defense of net neutrality.
The rollback at the FCC is a win for AT&T, which is vowing to fight the move by DOJ to block the company’s deal for Time Warner.