This week a federal judge approved the merger of AT&T and Time Warner. Nowadays, we count company consolidations in the billions of dollars. So, this $85 billion deal has been met with a yawn by most people.

The yawns are ill-placed, even though the two companies claim the merger will lead to better services to customers and allow them to compete with corporations such as Netflix and Amazon.

Nonetheless, more consumers are dropping conventional cable TV for streaming services. Given this trend, the once successful Time Warner model no longer works. The company needs to switch gears. A business partnership with AT&T is an ideal solution to Time Warner’s problems.

Nonetheless, the merger will lead to further consolidation and less competition in the marketplace for cable TV but (ironically) more competition in the video streaming business. However, streaming companies already face stiff and healthy competition. Time Warner and AT&T are going to attempt to join the bandwagon of the immensely successful Internet-based streaming companies.

As stated, this merger makes business sense for the two companies: Go after those companies that are defeating you. With some simple government rules, it can also benefit the public and the companies’ stockholders. I will expand on this idea later in this article.

According to a quote from Google: “Time Warner owns a vast array of media brands, including CNN, Turner, HBO, the Cartoon Network, Warner Bros., and many individual shows — everything from “Game of Thrones” to “The Big Bang Theory.” All these properties will now be united with AT&T, one of the country’s biggest internet and cellular providers as well as the owner of DirectTV, a satellite TV company.”

These large companies are not renowned for their innovation. They are renowned for their acquisitions.

The trends toward acquisition and consolidation have been going on for several years. The result has been fewer TV choices for the customer, higher prices, and more advertising. It is practically impossible for companies nowadays to enter the cable TV market. The costs to compete against companies such as Time Warner are prohibitively high. Plus, Time Warner (and AT&T) own many of the “wires” that other companies rely on for their very existence.

The variety of choices on conventional TV is limited. I have two CBS channels. They sit side by side in the frequency spectrum. They offer identical programs. I can watch 60 Minutes on either channel, but the program is offered on both channels at the same time! How ridiculous is that?

Streaming services allow the viewer to view hundreds of programs on demand. With cable TV, we are stuck with more infomercial channels than news or entertainment programs. Plus, we have little choice in choosing the channels for which we pay.

The nails in the coffin for conventional cable TV and likely conventional movie theaters are two-fold: I can watch a month of offerings on a streaming service (a) with no advertising and (b) at around the cost of slightly more than a movie ticket. If I cook my own popcorn and drink my own Cokes in my home, I save money by being a couch potato.

So, what is my problem with this merger? Simple. Time Warner and AT&T own the media on which companies that provide content such as Netflix and Amazon depend for their livelihood.

By media, I am referring to coaxial cable, telephone wires, and optical fiber from which broadband (high capacity) service is available. By content, I am referring to streaming movies and video games.

And therein lies the problem: The telecommunications companies want to get into the streaming business for the reasons cited above. That’s where the money is and where the future lies. In 2018 alone, Netflix’s stock has risen by 105 percent.

Why? Again, because of almost unlimited access to movies, documentaries, and TV shows at a reasonable price, with no advertisements, and with programs on demand.

Time Warner is both a media provider and a content provider. I call these companies “multifunction enterprises,” because they are in the media and content provision businesses.

AT&T is principally a media provider. (Wireless systems are not included in this discussion). There is no reason AT&T cannot get into the streaming business and become a full-fledged Netflix-like company.

Like Netflix, it could set up peering arrangements with internet service providers and internet exchange points, and develop similar software to that of other streaming services (this writer is unaware of how much of Netflix’s technology is under patent.).

A major issue on these kinds of mergers is as follows: Let’s assume Time Warner and AT&T throttle Netflix’s traffic or deny Netflix the use of Time Warner/AT&T’s media. Streaming companies, such as Netflix, that do not own their own media are dead in the water. In no way can they continue to function if they are denied Internet access and the physical media.

The restriction of not discerning among users’ traffic was one of the advantages of the now defunct Net Neutrality legislation. It safeguarded the big players, such as Netflix, as well as the little players, such as Uyless Black.

According to Jonathan Schwantes, senior policy counsel for Consumers Union, the advocacy division of Consumer Reports: “Allowing these two giants to merge [together] hands AT&T control of not only the largest distribution platform, but some of the most valuable content on television today.”

Even if Net Neutrality is dead, Uncle Sam should require the media owners (of cable, wires, fiber, and their equipment) to provide equal access of their media systems to all users, including content providers, such as Netflix. And the Netflixes of the world should compensate the media owners accordingly. If implemented with all parties sharing the pie, it can be a win-win situation for both service provider and service user: Competition can be based on who provides the best content, and not on the idea of who owns the “wires.”

Radical? Socialistic? Anti-capitalistic? No, because it is a two-way street. After all, America’s media/telecommunications infrastructure was built with Uncle Sam’s permission (legislation) in the first place. In many instances, Uncle Sam set up laws protecting the large telecommunications firms while they built-out their systems, just as was done with our national railroad system during the 19th century.

In turn, our government should establish legislation to protect the content providers from the potential predatory practices of the media owners who will likely provide (increasingly) competitive streaming services. I emphasize “potential” because no one can predict what these multifunction companies will do. Nonetheless, I am accepting friendly wagers as to what they will indeed do: They are going into streaming. That is where the money is. Ten dollars a month of thousands of on demand and advertising–free programs? Sign me up!

All Americans, including telecommunications companies and individual consumers, can benefit from a level playing field regarding the use of the physical media. I welcome the media owners to the world of content providers, but only if they fairly share what Uncle Sam guaranteed them: protective laws to get them started in their migration toward becoming monopolies.

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Uyless Black was working as a software programmer with the Internet when it was called ARPANET. He wrote the first detailed article about metadata (before it was so-named) for a cover story in Data Communications Magazine in November 1980. (“An Automatic Pilot for the Growing Distributed Network”) Prior to his retirement, Uyless lectured in 15 countries on data communications networks and the architecture of the Internet. He resides with infrequent interruptions in Hayden with his wife, Holly, mainly because he avoids social media, texting, and smart phones. Nonetheless, he welcomes conventional email at: ublack7510@aol.com