When You Merge The Message With The Medium, You Make A Messium

from Wired

THE NIXON ADMINISTRATION saw it coming. In a stunning January 1974 report, the Nixon White House Cable Committee foretold that the new telecom platform known as cable would, eventually, be a monopoly service wherever it was offered. The committee, whose membership included Mitt Romney’s dad, George, and which was staffed by a young Antonin Scalia, called for a “separation policy.” Its chief recommendation: Control of the cable medium should be separated from control of the messages on it. A federal mandate along these lines was urgently needed, the committee said: “If the achievement of a new relationship between government and the private cable medium is not anticipated but left to chance, the free flow of diverse information and ideas that is protected by the Constitution could be endangered.”

Nixon’s plan fell victim to the lobbying efforts of the cable industry—powerful then, much more powerful now—on Capitol Hill. Today, the Cable Committee’s predictions have come true: Both the cable and wireless industries, the transport networks on which everyone else rely, are fully mature, vertically integrated, and unruffled by competition. And they’re planning to erect separate kingdoms.

Here’s how these plans are playing out this month: AT&T wants to go “direct to consumer,” as a source of both original, exclusive shows and real-time-only exclusive content like sports and news. To get as much revenue as possible from perfectly targeted ads, they’d like to avoid middlemen and directly control data about everything you’re doing and watching. As a step along this empire-enhancement path, AT&T is fighting the Department of Justice: AT&T wants to acquire Time Warner so as to control HBO, CNN, Warner Bros., and other key sources of original content, and the DOJ has sued to block the deal. AT&T wants sympathy for its “market disadvantage against vertically integrated video content suppliers like Amazon, Netflix, and Comcast/NBCU.”

More here.

Posted in Business, Law, Technology and tagged , , , .


  1. Cable companies have been strengthening their hold over the average consumer for decades, as of 2013, 67 percent of households have 2 or less options when it comes to choosing a network provider (https://qz.com/186881/nearly-one-in-three-americans-have-no-choice-when-it-comes-to-their-internet/). Those with 2 options often find that instead of those providers competing with each other to lower prices they unofficially agree to keep their prices high. This is an unavoidable reality for millions of American and is certainly behavior warranting a close watch of these companies to avoid further oligopolization/monopolization. However a close watch without the intent of action is pretty pointless. Just like standing outside watching as someone robs your house, the only purpose of watching cable providers in this scenario is to make it look like you’re doing something so you don’t come under too much scrutiny. The fact is cable and network providers have simply too much control over the market as it is but they could always have more.
    The Department of Justice’s suit against the AT&T-Time Warner merger is an ideal example of the ultimate goal of network providers, that being, they want to own all of it. As this article suggests the more control cable providers have the more effectively they can cement their position as bane of the consumer. By owning both the content and the hardware one way or another you are going to pay these companies, even if you pirate the content you’re still paying for that connection you’re pirating over. That’s not an endorsement of pirating but just a realistic perspective of common activity. I would say I don’t understand how we’ve sat by and let it get this bad in the first place but it’s very clear those with money will gladly donate to the cause of making more money, which has more likely than not stagnated the urge for politicians to make meaningful reforms.
    Despite the efforts of these corporations all good things must come to an end and it seems the end is nigh. Even with a pro-business attitude of the current administration and leadership of the FCC progress cannot be stopped. The article suggests one solution being the creation of Municipal Networks to help consumers avoid the abuse of large power hungry companies like AT&T. While that may be a viable solution it still relies on the action of government and one of the only certainties in this world is the capacity for government to achieve nothing over long timespans. A far more probable outcome is as the article points out is the total subversion of the whole medium. Whether it’s Elon’s Musk plan to launch thousands of satellites into orbit or some other yet unknown technology if you abuse people long enough odds are someone smart enough will find a way to ruin you (https://www.theguardian.com/technology/2016/nov/17/elon-musk-satellites-internet-spacex).

  2. I agree with the article in saying that AT&T has a valid rationale to try to acquire Comcast. Yes, their competition, such as Netflix, Amazon, Google, etc., are vertically integrated. This being said, as the article states, AT&T is still distinctly different as none of its vertically integrated competitors are providing the medium. They are all simply providing content to consumers that is conveyed through numerous providers (such as AT&T). To allow AT&T to merge with Comcast would not put it on a level playing field with its competition; rather, it would take steps towards eliminating it in an anti-competitive merger.
    I feel that the analogy of the tribal nature of the companies is a particularly poignant one. It is maddeningly annoying enough to find out that, despite the fact you are already signed up for Hulu and Netflix, only Amazon Prime has that one show you have been really looking forward to watching. Even services which did not have a paid subscription component historically are now implementing it into their user experience, such as YouTube Red. Think about the greater implications if not only did services such as Netflix produce unique content solely accessible on that platform, but cable providers started doing so extensively. In a world in which “messiums” have been normalized, consumers will have an increasingly difficult time viewing the content that they want to if different vertically integrated companies buy up and consequently fiercely guard all of their content.
    One could argue, doesn’t this already exist? HBO owns the sole rights to Game of Thrones; is that not a “messium”? While it may seem that way, it is only scratching the surface of what could be. HBO is accessible across any cable provider; Verizon, Optimum, and yes, AT&T. Imagine if not only do you have to pay for a specific content creator (in this example, HBO) but you would also have to subscribe to a certain cable provider in order to watch the shows that you want to watch. This would not only be extremely frustrating, but potentially very, very costly for consumers. The entertainment business would be so divided that I could see it possibly doing damage to the industry.

  3. I find it fascinating that the Nixon Administration saw this coming back in 1974, and there is still no improvement regarding the amount of power top cable and wireless companies have in Congress today. Obviously AT&T should not be both a major provider of content and a major distributor of content; they will become way too powerful. Approving this acquisition would turn AT&T into a monopoly, which would directly hit us consumers with high prices and virtually no competition. But an unrecognized issue is the amount of lobbying power these huge corporations have in Washington, as well.

    The Nixon Administration knew that allowing the big dogs of the cable and wireless worlds to control the productions of content would spell nothing but bad news for everyone else, and they even came up with a plan to ensure that this would never be the case. But, as the article mentions, the plan failed because these companies could afford the top lobbyists in the nation to shut down the proposal. The predictions made by Nixon and his team, along with the predictions made by the Cable Committee, came true, and they still hold true today. These companies cannot be allowed to make content and distribute it at the same time, and we know precisely how badly this affects everyone except the executives of these companies. Therefore, the presence of these lobbyists in Washington should be severely limited, and yet it is not.

    It would be interesting to see what the final ruling will be on the AT&T-Time Warner deal in the coming months. We know that the deal will for sure turn AT&T into a monopoly, but the Comcast acquisition of NBC Universal is essentially the same type of transaction. NBC Universal, a creator of content, was purchased by Comcast, a distributor of content, and that deal was waived through by the Department of Justice. It seems to me that the DOJ would allow the AT&T acquisition of Time Warner to go through, simply because the Comcast-NBC Universal deal did. Or, the DOJ could deny this deal, and go back and do the same to the Comcast-NBC Universal deal. This deal might even give Verizon impetus to hop in the mix and acquire Netflix or some other producer of content. Regardless, what we are seeing is a battle between only a few major providers of content, with little room for small providers to stay afloat.

  4. The worst part about this situation was the fact that the Nixon Administration anticipated that the new telecom platform would be a monopoly service, and they did absolutely nothing to improve that situation in terms of the amount of power top cable and wireless companies that Congress have in their possession today. Major companies like Verizon and AT&T are both providers and distributors of content, which is not a positive thing, because there are too many powerful corporations as it is in the industry. As a result, we as consumers will be hit with higher prices and be left with little to no options in the tech industry.

  5. The emergence of monopolies in the cable and software sectors is growing fast. Partially due to the fact cable and wireless industries have very powerful lobbyists on Capitol Hill and partially because the majority of the United States doesn’t even know that their personal information or access to free flowing data are at high risk. Nixon’s plan fell victim to the lobbying efforts of the cable industry but his message for protecting user data and separation policy has continued long after the conclusion of his presidency.
    AT&T merging with Time Warner would be disastrous to the free flow of content because they would own the hardware and the content for media on phones, television, and more. AT&T are one of the first to push hard and even ask the Department of Justice for sympathy based on the fact that they are losing market share to competitors such as Amazon and Netflix. The Nixon Administration saw this coming and so those who share the same values as him will fight to make sure there are not gigantic telecom merges like this while they are in office. However what I fear the most, is a world in which people learn less about real world problems and are more consumed in sports and entertainment. I feel that the United States among other countries may be entering a new generation of thinkers that may not be aware of the importance of free flowing data. While millennials understand its importance and Gen X understand, the generations after them may not really care. I think then AT&T (another 30 to 40 years from now) will push to legislate for the AT&T and Time Warner Merger successfully and at that point in time it would be too late to fix the problem once Americans realize what they let happen to their personal data and free flowing content.

Leave a Reply

Your email address will not be published. Required fields are marked *