updated 05:40 pm EDT, Mon May 19, 2014
Senator is 'skeptical' of the deal that will lead to higher prices, less choice for consumers
Appearing on CNN's New Day, Senator Al Franken (D-MN) voiced his concerns regarding the recent deal that would see AT&T purchasing DirecTV for $48.5 billion. Asked about the mega-merger, Franken pointed out that the deal would likely raise prices further for consumers, and likely treads on antitrust grounds.
Franken spoke about the ramifications such a deal might have, with most stemming from the loss of competition in the market and impact it would have at the consumer level. Stating that he is "skeptical" of the deal, Franken added that he would like to see hearings on the subject. This is most likely to determine if there would be legal grounds for such a deal to go through without running aground of monopolistic practices.
This wouldn't be the first time that Franken has spoken up about competition in the telecom markets. Franken has been a known opponent of AT&T's proposed purchase of T-Mobile, as well as the Comcast-Time Warner deal. Recently, the Senator has also been outspoken on the path of net neutrality, a subject he is passionate about -- based on the potential it has to squash the voice of the people. A deal such as the AT&T-DirecTV could have a profound effect on the future of a free Internet if large corporations influence the content and speed of favored services, according to Franken.
"This usually leads to higher fees for consumers and less choices," said Franken. "We need to keep as much competition in the space [as possible] -- this is going exactly the wrong direction."
While the deal may contain wording to keep pricing from rising in certain areas for a period of three years, that doesn't mean that it will continue after that. It may have a further economic impact as well, based on the coverage areas of providers and their direct competitors (or lack thereof) in areas of the country. "The fewer players there are in the space, I believe the worse it is for consumers," says Franken.
He also adds that there is room for government agencies to step in and look at the content of the deal, to see if it is in the best interests of the citizens. While Franken recognizes that there isn't much within his power to stop a purchase from taking place, he pointed to the ability of the Federal Communications Commission and Department of Justice to scrutinize such deals for possible antitrust issues. The deal would consolidate a considerable amount of business into a single entity, effectively making AT&T the second largest provider in the United States.