Antitrust Laws in Question Group Wants Cable Deal Blocked

The Florida Times Union, August 17, 1999 | Go to article overview

Antitrust Laws in Question Group Wants Cable Deal Blocked


WASHINGTON -- Consumer groups are asking federal regulators to block AT&T's bid to buy MediaOne, saying the cable merger would give the company too much control in the markets for cable TV and high-speed cable Internet services.

Consumers Union, Consumer Federation of America and the Media Access Project joined yesterday in opposing the deal on grounds that it violates existing antitrust laws and federal rules that restrict the number of cable customers a single company can control.

With such a large percentage of the market, AT&T could block new companies from getting into the cable business -- which already suffers from inadequate competition and high prices, say the groups. They fear the company would be able to hike cable rates even more.

"This is a failure to aggressively apply antitrust and competitive policy," said Gene Kimmelman, co-director of Consumers Union.

Under an agreement announced in May, AT&T would acquire the nation's fourth-largest cable TV company, MediaOne, and its 5 million cable TV customers. AT&T also would acquire MediaOne's 25 percent stake in cable systems owned by Time Warner Inc., the nation's largest cable TV company.

The deal would lead to AT&T, which recently took over the nation's No. 2 cable TV company, Tele-Communications Inc., becoming the nation's largest cable TV provider.

According to an economic analysis by the consumer groups, AT&T would have a 57 percent market share of homes with its ownership stakes in various cable companies.

The Federal Communications Commission has a cap limiting a company's share of total cable households at 30 percent, but the rule has not been enforced. The FCC is expected to review the ownership restrictions this fall. …

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