AT&T-Mobile Merger on the Ropes

The Department of Justice delivered a major blow to AT&T's $39B plan to acquire T-Mobile by filing a civil antitrust lawsuit to knock the proposed deal out. The filing is now in the U.S. District Court for the District of Columbia's corner for review.

"The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services," Deputy Attorney General James Cole said Wednesday. "Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation's wireless carriers... (and) this lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition."

News broke last week of internal AT&T documents that indicated the company wanted to buy T-Mobile in order to keep the carrier out of competitors' hands, not to improve service and coverage as the company had publicly maintained. Still, AT&T said it was "surprised" by the lawsuit "particularly since we have met repeatedly with the Department of Justice and there was no indication that this action was being contemplated." The company said it will seek an expedited hearing so the "enormous benefits" of the merger can be reviewed.

Sprint cheered the decision saying the DOJ rightfully put consumer interests first helping to preserve jobs and strengthen the economy. However, in an ironic twist, a Forbes report now suggests T-Mobile may have to adopt a "scorched earth" strategy moving forward which would pit the company in an "all-out price war" with Sprint.

And in a non-statement, FCC Chair Julius Genachowski said, "Competition is an essential component of the FCC's statutory public interest analysis, and although our process is not complete, the record before this agency also raises serious concerns about the impact of the proposed transaction on competition." •

Media Institute: Google = Monopoly

The Media Institute submitted a paper to FTC officials saying Google's unrivaled internet dominance and in online advertising qualifies the company as a full-blown monopoly. The independent think tank says in order to maintain fair competition, the government needs to intervene.

"Google dominates the online advertising market... by skimming away the earnings of media companies as it scrapes up their content, denying them of the scale that would be required for effective competition," the Institute said.

The paper says content creators are at Google's mercy and have no choice but to participate in its advertising model or risk being invisible in search results. The Institute maintains that Google faces no governmental regulations to limit its power and, more importantly, there's no incentive for the company to change its behavior. •

Etc: Major CE Merger - Bloomberg's Final Plea - Flickme Goes Live

Retrans: LIN TV yanked its signals off Mediacom systems today and ACA's Matt Polka doesn't like it.  (We suppose Mediacom subs are a bit piqued, too.)  Matt's statement read, "It’s clear that the broadcasters aren’t going to temper their behavior this year just because the FCC has a retransmission consent rulemaking going on. New rules are needed from the FCC, and needed soon."  LIN TV's web site today read, "We will continue to negotiate with Mediacom. Unfortunately, we do not know if, or when, we will reach an agreement. In the meantime, we hope you will continue supporting local television and watch us through alternative means." (Note, irony lives, after yanking the signals, LIN notes, "Thank you for supporting LOCAL television.")

M&A: Three electronics giants - Sony, Hitachi and Toshiba - have reportedly agreed to merge their LCD operations with the help of $2.6B in government-backed funds. Reports say the merger will create the world's largest small panel manufacturer outsizing both Sharp and Samsung. --- DISH said it was pleased that the DOJ filed to block the AT&T-Mobile deal as a merged entity would reduce competition and create "barriers to entry for potential new entrants... seeking to enter the wireless broadband market... (and) further stimulate competition and innovation."

Rules & Regs: Bloomberg made a final plea to the FCC this week that Comcast is violating the "news neighborhooding" condition of the NBCU deal. Bloomberg's opinion on the matter is that the carriage condition applies to channels already carried by Comcast when the FCC approved the deal and that whether said groupings qualify as "neighborhoods" under the rule.

Strategy: ESPN said it is re-naming the online access point for its nets (ESPNnetworks.com) to WatchESPN.com. The WatchESPN app and WatchESPN.com provide authenticated access to ESPN, ESPN2, ESPN3, ESPNU, ESPN Buzzer Beater and ESPN Goal Line to subscribers who receive their video subscriptions through Time Warner Cable, Bright House Networks or Verizon FiOS TV.

Rumor Mill: NYP reports that AOL has been meeting with bankers to discuss the possibility of taking the company private. The move would enable the media company to take more risks and restructure without the prying eyes of shareholders...

Online: Movie rental site flickme.com launched this week featuring thousands of titles from Warner Bros. and Sony Pictures. The upstart distinguishes itself from other OTTs by incorporating Facebook and Twitter into its own platform. --- Kantar Media says whatever the cause, be it "daily-deals fatigue" or "summer vacation," Groupon and rival LivingSocial both saw serious traffic declines in July from June.

Tech: NetGEAR unveiled its new universal Push2TV HD wireless PC to TV adapter (think: reverse Slingbox) and a dual band wireless internet adapter for TV and Blu-ray players for ethernet-enabled home wireless networks.

Research: A Parks Associates report on internet video services says U.S. online viewers are spending an average of $50 for video subscriptions while a la carte video typically garnered less than half that amount. From 2009 to 2010, the number of purchased movie and TV-show downloads dropped by 56% and movie-rental downloads fell by 70%, the firm says.

SkyREPORT: Hughes subsidiary HNS Americas landed two orbital slots in the Brazilian communications regulatory authority's auction at 45 degrees W and 68.5 degrees W and will operate in the BSS, Ka- and X-bands.

Programming: BlueHighways TV will feature a special day-long tribute to mark the 10th anniversary of the 9/11 terrorist attacks by suspending all commercials and present a memorial honoring the victims.

Retail: Dealerscope says consumers aren't rushing out to buy surround-sound systems, but they're snatching up headphones like mad. According to NPD Group data, unit sales for the first half of 2011 were up 13% - a surge that pushed y/y dollar sales up 33% during the same period.

Ha!: Emmy-nominated actor Ed O'Neill - most famous for playing the disgruntled shoe-salesman in the now defunct "Married With Children" series - received his star on Hollywood's Walk of Fame... in front of a DSW shoe store on Hollywood Boulevard.

--- Catch today's media market news from The Evening BRIDGE. •