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AT&T/ Time Warner Merger Hurts Customers

AT&T/ Time Warner Merger Hurts Customers

AT&T and Warner Media’s Price Hike Is Disappointing But Not Surprising

 

Customers of Warner Media’s DirectTV NOW cable package will see a rate hike starting in April—the second in less than a year. With the ink just dry on the DirectTV/AT&T merger, this probably shouldn’t be surprising, except that Warner and AT&T kept saying prices would go down if the government just let them combine into a new, even larger telecom corporation.

 

For example, they told a court the merger “will enable the merged company to reduce prices, offer innovative video products, and compete more effectively against the increasingly powerful, vertically integrated… companies.” (That’s from their court filing after the antitrust lawsuit ended , via Vice Motherboard . The judge in the case found that kind of argument convincing. Yet somehow, when AT&T Warner Media had what it wanted, it did the opposite of reducing prices.

 

It might be worth remembering why the United States has antitrust laws in the first place. More than a century ago it was obvious that when companies merge into market-dominating leviathans there’s not much to stop them from jacking up prices and doing all sorts of other shady things. When consumers have only a few choices, they’ll probably all be bad choices.

 

Of course the hike itself is also being presented as a choice for customers: DirectTV NOW customers can have the option to buy NOW PLUS for $10 more month, or NOW MAX for $30 more a month. So many choices! But they can’t keep paying what they’re paying now—that’s not one of the choices.

 

Honestly, it’s hardly fair to single out AT&T Warner Media for this kind of behavior. This sort bait-and-switch is a classic move. The DirectTV price hike is just the latest example of the mentality that seems to take over every telecom behemoth, this is part of what Community Phone aims to solve. 

 

The real question is, why do consumers put up with games like this? But anyone who’s bought cable TV, home internet, or phone service can tell you the answer to that one, too. In most places you only get to choose between two providers, at most. It’s the same bad choice DirectTV customers are stuck with: more expensive, or more-more expensive? So consumers resign themselves to a certain amount of shenanigans from their phone company, their internet provider, and their cable TV provider.

 

Most customers would jump at an alternative if they knew of one. And in fact there are some smaller companies stepping in to offer alternatives to the big-name telecom hegemons. You just need to look for them.

 

For example, Community Phone is a cellular service providing an alternative to AT&T and the other giant networks. As a smaller company, they’re able to focus on things like customer service. On another front, netBlazr is trying to provide a local option for high-speed internet (only in the Boston area so far—where they’re teamed up with Community Phone to offer a package deal). The demand is clearly there. Customers who are tired of getting jerked around should look into whether options like this are moving into their areas.