WASHINGTON
At a two-and-a-half-hour hearing, Klobuchar, Franken and others questioned AT&T chief Randall Stephenson and Time Warner chief Jeffrey Bewkes about why marrying one of the country's biggest internet, cable and wireless providers with one of the country's biggest sources of movies, shows and news would not end in restrictions or charges that would drive up bills for customers and competing companies.
"We have seen this plot before," Klobuchar said. "Like a tired movie franchise, we can predict the ending before it begins. The promise of thriving competition collapses, replaced by dominant firms with monopoly power."
Both executives pledged under oath that they would not favor their own distribution platforms over others who wanted to distribute their entertainment and news products. They also said they expected the merger to reduce prices.
AT&T has 15.6 million internet connections, 45.5 million video connections, most through Direct TV, and 141.8 million wireless connections in the U.S. and Mexico. Time Warner owns CNN, HBO, Warner films and Turner Broadcasting. Consolidation would create a company with a huge hold on distribution and content. But executives offered a new Direct TV Go product that provides a 100-channel package for $35 a month as proof of their intent to drive down prices.
Klobuchar questioned whether that charge would go up once the merged company controlled much of the market. She pointed to a new study by Consumer Federation of America that showed the "typical" American household now includes two cellphones, one landline, a broadband connection and a multichannel video service costing about $2,700 per year. The study estimated even before the proposed merger, earlier consolidation in the market was already costing consumers $45 per month more than they should pay.
Franken bored in on the fact that the proposed merger has been submitted for antitrust vetting by the Justice Department, but has not yet been sent to the Federal Communications Commission (FCC) where the companies would have to prove that the deal would benefit consumers in order to have it approved.
Not ensuring consumer benefits "sends a bad message to Americans," Franken said.