What's Next For AT&T Megadeal? A Look Back At Comcast-NBC

AT&T is following in the footsteps of its rival Comcast in snapping up its own entertainment conglomerate - in this case, Time Warner.

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But what’s happened in the aftermath of Comcast’s 2011 purchase of NBCUniversal may cast a shadow over AT&T’s deal.

Like that earlier transaction, the $85.4 billion combination of AT&T and Time Warner would create a giant new company that not only produces movies, TV shows and sports and news programming but also delivers them to viewers.

Time Warner owns popular channels like HBO, CNN, TNT and TBS, plus Warner Bros. movies such as the Harry Potter and DC Comics superhero franchises, while AT&T has its mobile network and its DirecTV service.

AT&T says it is looking for ways to provide innovative new services, which means leveraging

Time Warner’s offerings to attract customers, analysts say. But doing so might easily limit consumer choice should AT&T decide, for instance, to withhold certain shows from its rivals or to grant better access to AT&T customers.

Because AT&T is effectively buying one of its suppliers, not a rival, the deal doesn’t directly limit competition, and the company argues that regulators should approve it, possibly with conditions to protect consumers. That’s what happened in the case of Comcast and NBC.

But such conditions leave lots of room for interpretation and can be difficult to enforce. They’re also usually stamped with an expiration date.

So for a glimpse of what the future might hold for AT&T and Time Warner, a look back at the Comcast-NBC merger can be instructive.

IN COMCAST’S SHADOW