AT&T/Time Warner: Rube Goldberg Machines, Bob Dylan Quotes and a Shifting View of Video Programming Competition

My partners Mark Palchick and Marty Stern have written a good article on the District of Columbia's recent antitrust ruling rejecting the U.S. Justice Department's efforts to block AT&T's acquisition of Time Warner.

AT&T/Time Warner DOJ Smack Down: You Don't Need a Weatherman to Know Which Way the Wind Is Blowing.

Interesting stats from their article:

• The District Court's opinion is 172 pages long.
• There are over 20 exclamation points!
• References to Rube Goldberg machines.
• And at least one quote from Bob Dylan.

Here is the takeaway from their article:

The evidence adduced at trial also seemed to contradict a central concern of the Open Internet rules -- that broadband distributors will block access to rival video sources. The court found that distributors have a strong incentive to maximize distribution of video programming on their networks, not curtail it.

If you read nothing else in the opinion, and want a plain English description and a clear distillation of the current state of the programming supply and distribution markets, and the cut-throat, highly competitive, knock-down, drag-out negotiations between programmers and distributors, complexity, warts and all, peruse pages one through forty of the opinion.  It is a wonderful distillation of how the sausage is made.  While there are many, one key take-away from that discussion is that there is no more “must have” national programming, which is now a mere marketing term, and the absence of particular channels on an MVPD platform does not preclude the ability of MVPDs to compete in the marketplace.

 Clearly, according to the judge, the market is shifting away from MVPD competition and the traditional cable and broadcast advertising markets based on linear, live programming and gross eyeballs to a market focused on data-driven targeted advertising, driving data usage through subscriber video consumption, and on the competition between wireline and wireless providers to be the broadband delivery method of choice.  “[A]s Nobel laureate Bob Dylan correctly observed,” noted the court, “‘You don't need a weatherman to know which way the wind blows.’”

Mark Palchick and Marty Stern are partners in the Communications, Technology & Media practice of law firm Womble Bond Dickinson in Washington, D.C. They are co-authors of the firm’s Communications, Tech & Media Review blog.