The Beneficent Monopolist: Allen Grunes and Maurice Stucke on the Comcast/Time Warner merger.

 

 


Allen P. Grunes 


GeyerGorey LLP

Maurice E. Stucke 


University of Tennessee College of Law

March 26, 2014

Competition Policy International, April 2014, Forthcoming 


Abstract: 

In examining Comcast’s proposed acquisition of Time Warner Cable (TWC), we assess three of the arguments Comcast likely will make to the Department of Justice and FCC. Comcast will likely argue that its acquisition of TWC is unlikely to lessen competition because: (a) the broadband market is becoming more competitive: Google has introduced Google Fiber in a number of markets, and mobile broadband offered by wireless providers like AT&T and Sprint is competitive with fixed broadband; (b) Netflix and traditional media companies have sufficient clout to negotiate with Comcast and the government should not intervene on their behalf; and (c) the “wide array of FCC and antitrust rules and conditions from the NBCUniversal transaction in place . . . more than adequately address any potential vertical foreclosure concerns in the area of video programming.”

We argue that notwithstanding Comcast’s and TWC’s assertions, combining two monopolies does not yield better service, lower retail prices, more innovation, and greater choices for consumers. Nor should the DOJ and FCC simply extend the prior behavioral remedies to this merger. Behavioral remedies are a poor substitute for market competition. Comcast and TWC have not overcome the presumption of illegality for this merger and are unlikely to do so. As was the case with AT&T/T-Mobile, DOJ should just say no.

AAI Event with Susan Crawford, Allen Grunes, Bert Foer and Don Resnikoff discussing telecom competition (November 22, 2013)

The American Antitrust Institute, in cooperation with co-sponsor Antitrust and Consumer Law Section of the District of Columbia Bar, presents Susan Crawford discusses telecom competition and her book Captive Audience with Bert Foer, Allen Grunes, and Don Resnikoff

Event Details:

  • Friday, November 22, 12:15 to 1:15 PM
  • Register by sending an email to programinfodonresnikofflaw@mail.com
  • Call in information for the teleconference will be e-mailed to you.
  • There is no charge.

About Susan Crawford:
Susan Crawford is a professor at the Benjamin N. Cardozo School of Law, a fellow at the Roosevelt Institute, and a co-director of the Berkman Center. She is the author of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, and a contributor to Bloomberg View and Wired. Don Resnikoff’s review of Captive Audience is available here. An excerpt from the review is at the end of this notice.

The American Antitrust Institute, in cooperation with co-sponsor Antitrust and Consumer Law Section of the District of Columbia Bar, presents
Susan Crawford discusses telecom competition and her book Captive
Audience with Bert Foer, Allen Grunes, and Don Resnikoff

About Bert Foer:
Albert A. (“Bert”) Foer is President and Founder of the American Antitrust Institute. His career has included private law practice in Washington, DC); the Federal Senior Executive Service (as Assistant Director and Acting Deputy Director of the Federal Trade Commission’s Bureau of Competition). He has published numerous articles, book chapters, and reviews relating to competition policy.

About Allen Grunes:
Allen Grunes is a member of AAI’s Advisory Board. He is a partner at GeyerGorey LLP, a firm started one year ago by three former DOJ Antitrust Division lawyers. Allen spent more than a decade at the Antitrust Division, where he led many merger and civil nonmerger investigations in radio, television, newspapers, motion pictures, and other industries. He and fellow AAI Advisory Board member Maurice Stucke have coauthored several articles on media and telecom, including “Antitrust and the Marketplace of Ideas” (Antitrust Law Journal), “Antitrust Analysis of the AT&T/T-Mobile Transaction” (Federal Communications Law Journal) and “Why More Antitrust Immunity for the Media is a Bad Idea” (Northwestern Law Review). His practice includes advising clients on mergers and acquisitions, providing counseling on non-merger matters, and representing clients in federal court, before the federal antitrust agencies and before Congress. His extensive experience includes media and entertainment, telecommunications, and the high-tech sector. He was named as a “Washington D.C. Super Lawyer” for 2013. 

About Don Resnikoff:
Don Resnikoff is a member of AAI’s Advisory Board, and the organizer of this program. He is currently in private practice in the District of Columbia. He previously was a Senior Assistant Attorney General for the District of Columbia. Before that he served for more than twenty years as an antitrust litigator with the Antitrust Division, United States Department of Justice. His experience also includes private practice corporate litigation as a partner with a New York City firm, recent Of Counsel experience, and service as an Assistant United States Attorney in New Jersey.

From the Resnikoff Review of “Captive Audience:”
Susan Crawford’s bottom-line observations are straightforward: For internet service customers, there are only a few companies from which to buy. Of those, a small number of large companies provide internet service by a cabled wire or fiber-optic connection. Comcast is the most important. Comcast and other cable companies each dominate large geographic regions with little competition. Each can raise prices for fast internet access without significant constraints.

A small number of large companies provides internet service using wireless radio technology instead of cabled wire or fiber-optic connections. Wireless internet access is dominated by AT&T and Verizon. Crawford explains that wireless internet transmission is in a separate market from wired because
wireless transmission of digital signals is too slow to compete with internet service delivered by wire or fiber-optic cable. The wired and wireless products are complementary, not competitive.

To make matters worse, government approval of the Comcast merger with content provider NBC Universal has reinforced a situation where cable companies that dominate distribution of digital signals also control important content. The consequence is that Comcast, the largest high-speed internet distribution company, is in a position to throttle independent providers of television content such as movies and sports.

Maurice Stucke: Looking at Monopsony in the Mirror 62 Emory L.J. 1509 (2013)

Although still a distant second to monopoly, buyer power and monopsony are hot topics in the competition community. The Organisation for Economic Co-operation and Development (OECD), International Competition Network (ICN), and American Antitrust Institute (AAI) have studied monopsony and buyer power recently. The U.S. Department of Justice and Federal Trade Commission pay more attention to buyer power in their 2010 merger guidelines than they did in their earlier guidelines. With growing buyer concentration in commodities such as coffee, tea, and cocoa, and among retailers, buyer power is a human rights issue. (Continue Reading)
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More Biographical Information for Maurice E. Stucke