Business | AT&T's Stephenson takes on Google’s Schmidt with Time Warner

AT&T’s Stephenson takes on Google’s Schmidt with Time Warner

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WASHINGTON (BBN) — AT&T’s US$ 85.4 billion dollar bid for Time Warner is seen marking the end of Alphabet and Facebook’s dominant position in the US media market and heralding new antitrust action by the incoming administration of President Donald Trump.

[21st Century Fox (NASDAQ: FOXA) and News Corp (NASDAQ: NWS) Executive Chairman Rupert Murdoch speaks to Capitol Intelligence/Black Business News (BBN) using CI Glass on AT&T (NYSE:T) for Time Warner (NYSE:TWX) at The Wall Street Journal CEO Council Summit in Washington, DC. November 15, 2016]

The incoming administration of Donald Trump is looking at taking long overdue antitrust action both by the Justice Department and US Federal Trade Commission. The outgoing administration of Barack Obama gave a “free ride to Google, Facebook and Silicon Valley,” a Washington, DC antitrust attorney close to the Trump transition team said.

AT&T CEO Randall L. Stephenson is reinventing AT&T into a content delivery company following its acquisition of Direct TV for US$ 67 billion and the takeover of Time Warner and its content leaders HBO and CNN.

Donald Trump said during the campaign he would block an AT&T takeover of Time Warner, but the antitrust source said Trump spoke too soon. The AT&T bid poses fewer antitrust issues as it is a vertical integration and not a takeover of another wireless carrier, such as AT&T’s failed bid to acquire Deutsche Telekom unit T-Mobile in 2011.

[AT&T Chairman and CEO Randall L. Stephenson talks to reporters filmed Capitol Intelligence/BBN using CI Glass after speaking at the Economic Club of Washington DC on June 16, 2014]

Stephenson said he sees the main driver for wireless carriers will be video on demand and the ability to have must see content on the AT&T network as opposed to recycled content on social media platforms like YouTube, Facebook, Snapchat, Instagram and twitter.

“A new Renaissance of original content is about to happen. Everyone knows that social media biggest weakness is that it depends on others for free content,” a top M&A media lawyer said.

The AT&T deal will also happen after the Trump administration replaces Tom Wheeler as Federal Communications Commission (FCC) Chairman. The former lobbyist, Wheeler has been consistently closer to Silicon Valley interests than those represented by traditional media owners such as 21St Century (NASDAQ: FOXA) Executive Chairman Rupert Murdoch and minority owned media operators.

[Federal Communications Commission Chairman Tom Wheeler speaks to Capitol Intelligence/BBN using CI Glass at Newseum following National Journal IP Transition conference on Feb. 6, 2014]

Speaking to Capitol Intelligence/BBN at The Wall Street Journal CEO Council event in Washington, DC, Murdoch said the AT&T deal brings the debate regarding net neutrality — the principle that internet service providers should enable access to all content and applications regardless of the source — closer to his point of view rather than those of Google.

The US FTC concluded in 2012 that Google Inc under executive chairman Eric Schmidt used anti-competitive tactics and abused its monopoly power in ways that harmed Internet users and rivals, The Wall Street Journal reported in March last year based on a leaked FTC report.

The report recommended that the FTC bring a lawsuit challenging three Google practices which would brought highest profile antitrust lawsuit since the DOJ sued Microsoft Corp in the 1990s and the 13-year IBM antitrust battle in 1976.

In fact, Eric Schmidt became the Washington, DC lobbyist for Google founder Larry Page and Sergey Brin almost immediately after Obama took office.

[Google Executive Chairman Eric Schmidt speaks to Capitol Intelligence using Google Glass at New America Foundation. Washington, DC, May 22, 2014]

There has been a revolving door of Google executives at the White House and Google was the second-largest largest corporate source of campaign donations to President Barack Obama and by far the biggest Silicon Valley cheerleader for Hillary Clinton.

Unlike Larry Page and Sergey Brin, Eric Schmidt is not afraid to meet the public and socialize with people who do not come from the West Coast tech world. Schmidt is so DC savvy he was able to be a keynote speaker at a closed press event hosted by Supreme Court Justice Ruth Bader Ginsburg in the Supreme Court itself organized by the Davos WEF-like Salzburg Global Seminar in November 2014.

Late Supreme Court Justice Anton Scalia was frequently criticized for socializing privately with business owners and others who may have or had business with the Supreme Court.

In fact, the stock market is showing that the social media bubble will meet the same fate, and most probably worse, than the dotcom bubble crash of 2000. Witness the almost US$ 50 billion for Uber, US$ 30 billion for Airbnb and Google and Facebook’s current market caps.

[Cisco Systems Chairman John Chambers speaks to Capitol Intelligence/BBN using CI Glass at New Economy Forum at IMF World Bank annual meetings in Washington, DC. October 5, 2016]

Cisco Systems Chairman and Founder John Chambers said market corrections are normal and predicts that 40% of companies existing today will no longer be around in five or so years.

By PK Semler in Washington, DC. For information please call +1-202-549-3399 or email pks@capitolintelgroup.com

Copyright of Black Business News (BBN), a news service of Capitol Intelligence Group — Turning Swords into Equity®

PK Semler
Peter K. Semler is the Chief Executive Editor and founder of Capitol Intelligence. Prior, Peter was the Washington, DC Bureau Chief for Mergermarket (Dealreporter/Debtwire) of the Financial Times and personally headed political/economic coverage of the US House of Representatives and Senate.
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