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Trump thank you. You cant always get what you want you cant always get what you want you cant always get what you want but if you try sometimes you might find you get what you need i saw her today at the reception a glass of wine in her hand i knew she would meet her connection at her feet was her footloose man get what youays want you cant always get what you want you cant always get what you want , youtime try might find you get what you need on monday, donald trump will speak at a grand Rapids Michigan rally. We will have live coverage at noon eastern. At 6 15, we will show you Hillary Clinton speaking at a Campaign Event in cincinnati. See both of those events here on cspan. Cspan, where history unfolds daily. In 1979, cspan was created as a Public Service. To you today by your cable or satellite provider. On the communicators, a discussion about the proposed merger between at t and time warner. Here to discuss our two men who watch Telecommunications Policy here in washington. Washington. The Senior Vice President of Public Knowledge and the president of the Technology Policy institute. Lets begin. What would this merger mean to at t . At t wants to buy lots of content. It sees this as the future of the industry following the comcast merger. At t is hoping to vertically integrate with time warner. What does vertical mean . And a horizontal merger you have two companies who compete with each other merging. Tmobile merger would have been horizontal, and it was blocked because of concerns related to that. In a vertical merger, you have an upstream and downstream Company Providing they are in separate markets. You are not changing the industry concentration in either one. The Justice Departments tends to look at those differently. Vertical mergers are easier to get through then horizontal mergers where you have to show that there will be improved efficiencies from the merger and there will be an anticompetitive effect which are typically less likely in a vertical merger. To aat would this made consumer of at t or time warner . I think there is a lot of reason to be skeptical about this merger. Particularly based on what we have seen and how the industry has involved and the increasing concentration within the industry and the vetting of the marquis programming, not just the clips you have on youtube but the bigname programming names movies coming out of these studios that are critical for the success of online streaming services. Is the concern here thing that consumers ought to be most concerned about is at t is a National Wireless carrier and they are also in another line of business but they recognize that the shift in watching video is moving from the big screen on the wall to be in in the handheld devices. Comesa lot of that money from data overages, limiting on your data cap there is also a lot of money in advertising that they are increasingly becoming involved in with the heading [indiscernible] fcc voted on yesterday and one of the things the sec found in looking abroad their privacy was Companies Like at t have a tremendous window into you aree because as every device becomes connected to the internet as you carry a cell phone that is connected to the internet with you everywhere at t is your provider can see what you can get for breakfast out of your smart refrigerator, what you when you go to work in the morning, when you are walking by a mcdonalds on the way to work and can combine that with its content that it would get from this to essentially dissect every element of your ite as a consumer and market back to you with these advertisements so that is one very important concern for consumers is you really want at t following you around figuring out how to best sell you stuff some people may like up and a lot of people have concerns about that the other is the pricing and the locket on the information. At t will have incentives to push people toward its content and away from the content of others. We have some rules about that right now with what is called network neutrality, they cannot directly interfere with my going to a rival news company but what they can say is if you want to watch cnn, that will not count against your data cap but if you want to watch msnbc or bloomberg or fox news on your mobile set, you will, so, they will have this capacity to push people in a particular direction and particularly when it comes to things like news which is part of this, that is very troubling for democracy. Before we go further, lets get video day you involved lydia involved. She is a telecom reporter. You mention with a vertical integration there is usually ins antitrust concern but truth, as both of you can speak to what precise legal and regulatory issues might be raised by opponents who oppose this bill . I should let harold talk about legal issues because as an economist i dont not know any laws i do not know the any laws. Together, we know nothing. Specifically, though, on issues one of the things that harold mentioned is how time warner will treat content its content relative to how at t will treat them. He is right. That is the potential way that is a vertical merger could be anticompetitive. They treat their own content differently. That is going to be the biggest one. Harold is bringing in the privacy issue. I is not sure that that fits into the merger itself. That seems like a different issue. Beis definitely going to this question of whether at t has both the incentive and the ability to foreclose on rivals or raise costs and in trying to think that through, they are going to look at the incentives on different sides. On the one hand, you can imagine that they would profit by contentcosts or keeping from others and so on. On the other hand, at t on the video space has about at t and directv have about 25 of the subscribers. And also, not majority of internet subscribers so they try to withhold content, they lose licensing fees and advertising and the revenues associated with that. It is not clear that they would even have the incentive to do that. That said, i am sure that is what the doj will focus on. There are a couple of things from a legal perspective. That there is a big question whether the federal Communications Commission which one would think would be absolutely in the thick of Something Like this, whether it is dealing with one of our largest Communications Providers , our largest entertainment producers, but, because of the way the law works, it is not clear what role the fcc will have. There is a lot of speculation the because at t which is company that is regulated by the fcc is the one purchasing time warner that the deal can be structured in a way that completely avoids fcc review and traditionally,ut certainly, a lot of the concerns i have been talking about, the concern to democracy and news production, the concerns about privacy are more the subject of fcc interest to review than the department of justice. So, but, i do want to emphasize that we are actually at an important shifting point in antitrust and antitrust law and review and again these are evolutionary changes that do not take place overnight but we have certainly seen within the last decade, first a change in the literature around antitrust, scott has exactly described what traditionally it has been for the last 40 years and if you go to and antitrust lawyer, that is exactly what they will tell you the department of justice has traditionally looked at. It is important to recognize that we have been seeing a gradual evolution particularly around these kinds of vertical mergers and particularly in these very large complicated markets. Comcast nbc merger and what happened after that is something that people. 2. On the one hand, certainly you look at that and said department of justice reviewed it and a putting conditions in a improved it. We have six years of administering those conditions and as we found out in the comcast Time Warner Cable merger offer which was again that was horizontal budget a lot of the concern about it came from not expanding that vertical integration power with the enhanced reach that they would have after the acquisition so i think in fact, there is a lot morescope and a lot challenges for at t with regard to some of these vertical issues then we have previously seen. To be moree going challenges because of the political environment and so one and because even if they were able to get rid of them to make sure no licenses change 10, there is no way the fcc is going to stay out of it but i think that comcast nbc merger is a good precedent. You say what has happened since . Whatthere hasnt been bad things have happened that are related to the merger itself . From comcast and nbc . Lowes companies are doing pretty well. Nbc was a terrible network the time of the merger. Theyou know, most of critiques i have seen are things i do not have to do with the merger itself so i had some examples i mean, the one what has really come up and came up in the discussion of the comcast Time Warner Cable was the ability of the department of justice to actually enforce in monitor the behavioral conditions so the biggest most disney example was when and news corp. Or looking at and it wouldhulu potentially become a competitor in streaming and the allegation was that despite a merger condition that said comcast would not try to interfere with that, there was evidence that Brian Roberts had gone to the heads of news corp. And disney you were making these decisions and say, well, you know, maybe you guys ought to consider, you know, comcast might want to invest more in you if you dont do this deal so a potential new thisor was squashed was precisely the danger that department of justice was concerned about, that is precisely why they imposed the condition and they didnt know about it until after the fact when they were investigating another merger. Well, the department of justice apparently felt strongly enough about it because we never went to because they withdrew we never had a complaint we never do for certain but i can point to that i can point to the effort by there was a startup which tried to gain access to video programming under the video access condition that was there that would stimulate over the that did not work out very well. Love that, i mean, with that example, that is a tough one because either on negotiations. Sometimes Cable Companies pay a broadcaster or a content creator to they have to pay espn did somebody doesnt get on is it because of what the reasons you are talking but it because it was a negotiation that didnt work and something that we would never be able to separate out i agree but that is part of the reason why are there such [indiscernible] that the old attitude i would ,ay was because we dont know we should let the merger go through. I think there is an emerging sensibility of we have a lot of concentration in the market already. We are seeing a lot of difficulty in competitors emerging when we cannot think that it is safe we should be more skeptical rather than let a go through and hope that we have a conditions to stop it appeared i do question for you both. This merger announcement comes at a Pivotal Point for our nation and that of course is the president ial election. Now Hillary Clinton has taken he is not really taking a position to she said that folks should look into it but she is not opined donald trump has said he would disapprove it if he becomes president. What do you think the potential outcome of the election might play not just on this merger and the federal regulators that may be in charge of it but also on other subsequent merges to pity on who wins the white house . Will first of all i think that the timing is really interesting. Because you know when said he would not approve the merger, it was pointed out that the president is on an essay on the other hand, at this point in time, the president actually could have a say in it because the president has to appoint who is going to the next added the antitrust division at who will be the next chair of the fcc and potentially they can make a litmus test of what they want could the outcome the like they cease to win this case you can see the president having a big effect through at least the appointment process either direction now of course what donald trump thinks you might be some the differential mario who knows what he thinks but i do think that very interesting report to do here is you are right that clinton did the president ial thing and say well you know if i were president of an make sure that we studied it very carefully which is that the they were supposed to say even the more centrist wing of the Democratic Party has made it clear that they think that antitrust needs to be revised, strengthened. What i like to call the new, new antitrust. Busters were accused of being as generically bad, power that was concentrated. Antitrust, since the 1960s and 1970s, which has become the standard antitrust, is economic efficiencies, versus technocratic. Of the new, new antitrust goes a step further. A say they need to recognize the limits of our economic analysis. Of that a lot of times, we are just guessing. But there are the dangers of are unsureon when we we should be skeptical, rather than let it go through. I think that particularly if the democrats are elected, we are very likely to see, even if it does not impact of this merger specifically, the attorney general and folks that they department of justice and other agencies, more interested in these new ideas of antitrust. At its surface, does it make economic sense . The economics suggest it is hard to see the harm in it. They are in separate markets. Both industries are evolving. Where they will end up, nobody knows. Turn out to be a terrible idea for both of those companies. We have seen that before. My turned out to be a great idea. Might turn out to be a great idea. If you can protect against those harms, it might be a great experiment. Out,e merger does not work it is fine as long as they are not harmful. Dataey have pointed to the they could potentially leverage from this combination. Hoping to reduce the cost of the content through advertisement. You mentioned the evolution of antitrust laws and market economics, how might the data that a combined at t and time burner be able to mine and combine multiple platforms here . Just from the economics of the merger, but the antitrust review of it . I still do not understand how the new privacy roles of the sec will pass. We do not have a draft of the order yet. But in principle, at t will be operating under one set of privacy roles. Those twoot know how things will fit together. Setting aside what you think about privacy roles and whether at t should be under different roles in the content side, i do not know how you put those two together when they operate under separate machines separate regimes. I do not know how to answer that question. From an economic perspective, there are a number of things to look at. One, we see movement in the european union. Information harvested and collected. There is recognition this has value, recognition it can be combined with other information in the market in ways that can have anticompetitive effect. It can be used to impact consumer behavior. If i know how to make it harder for you to switch, i can reduce the ability of people to compete with you. Similarly, i can likewise use you, somewhat say to give stuff that is good for you, a positive benefit. Or also, to know when competitors are offering you come eating offering you competing services, and do my best for that. This goes back to when we broke up the at t monopoly. We said we really have to segmented these businesses because we cannot have the people who know all the information all be doing also be doing a longdistance and have those pieces interact. We didnt with the cable act of 1992 where we actually tried to break up content and the cable industry. Privacy, thisto raises a very serious concern. Is, again,cern that not in the traditional antitrust debt. But as Digital Information has become more important, its impact on competition has become more important. It is coming in as the new antitrust. Is there are a couple things. On the eu point, harold is right. The eu is looking at troves of data as potentially anticompetitive. They are still arguing about that. It is not clear that that is not the case. It may not create a barrier to entry. And having data is not valuable in itself, you have to have the Processing Power and knowhow. That is an actively debated question. The second point about the back, how weooking have separated content, that goes to the point that the boundaries of the forms are fixed. Sometimes inhouse, sometimes out of house. As time changes they send things often bring them in. What they choose to do inside and outside will depend on the transaction costs involved. The right answer today is the wrong answer tomorrow, and vice versa. It is a good thing. Congress has scheduled one hearing on this merger in the Senate Judiciary committee. You expect or anticipate congress saying in looking at this merger . Congress, when you have a larger merger like this, plays a combination of bully pulpit and public temperatur