Daily Digest 6/15/2018 (AT&T Owns Time Warner)

AT&T announced it had completed its $85.4 billion acquisition of Time Warner. The Justice Department still has 60 days from the date of the ruling to file an appeal, even if the companies close the merger, and such a filing remained a possibility. There was a time limit on when the government could seek an injunction, because the merger agreement between the companies expires on June 21. If an injunction had been granted, the companies would have had to extend the date or AT&T would have had to pay Time Warner $500 million in what is known as a reverse termination fee. AT&T can now take advantage of Time Warner’s business to develop new lines of revenue. The phone giant plans to marry its subscriber data with Time Warner’s TV networks to sell targeted advertising, which sells at higher rates. The company is also looking to tap its creative engine to generate new forms of video for mobile devices.

As the race to become the first company worth $1 trillion enters the final lap, technology monopolies are dominating the stock market. The five biggest companies by market value are US tech stocks: Apple, Amazon, Alphabet, Microsoft and Facebook. Between them they accounted for more than a third of the $2.7 trillion increase in value of the S&P 500 in the past 12 months. Worse, the top five now make up more than 15% of the S&P, the most for any top five since early 2000. Is it time to worry that the market is getting top heavy?

The New York State Public Service Commission ordered Charter Communications to pay a $2 million fine and complete network construction that was required as a condition of Charter's purchase of Time Warner Cable. If Charter doesn't meet its merger-related obligations, the company will "face the risk of having the merger revoked," the commission said. The commission said that state law gives it the authority to rescind merger approvals and threatened to start a proceeding to rescind or change the merger approval order if Charter refuses to comply. The threatened action could reverse Charter's 2016 purchase of Time Warner Cable's telecommunications network in New York, although Charter would likely contest such a decision in court. (This would not affect the merger in other states.) "We're evaluating our options at this point," a Charter spokesperson said.

Internet service providers are stepping up their fight against a California net neutrality proposal that would explicitly prohibit providers from exempting material from consumers' data caps. The proposed law, approved last month by the state Senate and currently before the Assembly, restores Obama-era net neutrality rules that ban throttling, blocking, and charging higher fees for prioritized delivery. The measure also would explicitly ban "zero-rating" -- or the practice of exempting certain material from data caps. In addition, the proposed law also limits some forms of paid "interconnection" agreements, which involve companies like Netflix paying broadband carriers to interconnect directly with their network. Consumer advocates say that "zero-rating" schemes enable broadband providers to favor their own content -- typically video -- at the expense of competitors. But the telecoms argue that zero-rating benefits consumers by allowing them to access TV shows and movies without incurring data overage fees.

National Telecommunications & Information Administration administrator David Redl warned Congress that the "security and stability" or the internet are at risk due to pressure to comply with the European Union's new General Data Protection Regulation (GDPR), which went into effect May 25. That warning came June 13 in the Senate Commerce Committee's first oversight hearing of the NTIA under Redl, its new administrator.  Committee Chairman John Thune (R-SD) said the committee was also looking at the GDPR and would seek Redl's input. Redl said getting broadband mapping right was another key priority for NTIA. Ranking Member Bill Nelson (R-FL) took the opportunity to call for an oversight hearing of the Federal Communications Commission as well. He said FCC Chairman Ajit Pai had pursued the most aggressive and anti-consumer deregulatory agenda in the history of the FCC, and it "demanded the scrutiny of this committee."

The House Digital Commerce and Consumer Protection Subcommittee drilled down on targeted digital advertising. Subcommittee Chairman Bob Latta (R-OH) said the idea behind the hearing was to look at the benefits as well as the "emerging, high-profile challenges" of digital advertising, including the Russian election influence ads that have drawn calls, and some action, for better identifying who is placing those digital ads. The use of the word "challenges" was telling. Other legislators have labeled them "scandals" or "problems" in need of government fixes. Subcommittee 

Ranking Member Jan Schakowsky (D-IL) was less sanguine about the online ad experience, talking about ads being annoyed and being tracked online. She said most Americans don't like to be tracked and want more control over their information. She talked about consumers being tracked wherever they go online, which would only increase in an internet of things (IoT) world. She talked about Russian election ad meddling, ads for junk financial products targeted to communities of color, and said the potential for discrimination was an ongoing issue that Congress had not sufficiently addressed. She also suggested the Federal Trade Commission does not have sufficient enforcement authority to protect consumers information and how it is used and shared. She referred to the Facebook "scandal" in making her point.