Net Neutrality Repeal: An Implication for Content Mergers?

Kelley Drye & Warren LLP
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The FCC recently repealed the net neutrality rules.  Now your favorite ISP can charge more for better and faster access, deny you access to sites you really shouldn’t be looking at (we’re looking at you CNN), and degrade all those over-the-top services you should be getting indirectly on their platforms anyway.  One thing repealing net neutrality has done that isn’t particularly helpful to big business is make platform-content provider mergers harder.

How so, you ask.

One argument against platform-content mergers is that the platform provider can favor its own platforms for the delivery of must-have programming.  That could drive consumers away from competing platforms, distorting the market for the platform.  Justice has alleged that AT&T plans to do this very thing once it gets its hands on Time Warner.  And there are a variety of ways short of refusing to deal that a platform provider could favor its own platform.  Providing content on a delay or degrading its quality or delivery to competitors.  Engaging in price squeezes.  The net neutrality rules made doing a lot of these things at least moderately more risky.  Without them, it’s much easier for an integrated platform-content provider to engage in those behaviors.  Net neutrality therefore served as an argument that AT&T would not be able to prefer its platform and thus could not engage in the post-consummation predation Justice argues is possible.

That argument is gone now.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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