donald trump <u+2019>s antitrust policy is unknown, but the obama administration has been strangely friendly toward monopolists and hostile to dynamically changing marketplaces. team obama sued apple and booksellers because they <u+201c>conspired<u+201d> to break open amazon<u+2019>s monopoly on the e-book business. now the justice department has brought a similar case against satellite broadcaster directv over the l.a. dodgers. one scratches one<u+2019>s head: the suit<u+2019>s sole purpose apparently is to make sure tv subscribers can<u+2019>t avoid paying for expensive local sports teams they don<u+2019>t watch. everything about this case runs against the current trend of competitive <u+201c>unbundling.<u+201d> the saga actually begins as an early chapter in the book titled <u+201c>the sports bubble is popping.<u+201d> in 2011, time warner cable, a tv distributor covering part of the los angeles area, struck a wildly expensive deal with the new owners of the dodgers to air the team<u+2019>s dedicated new tv network for 25 years. sportsnet la was born. but, lo, other local cable and satellite distributors in the area balked at the exorbitant terms time warner cable was asking for carrying the channel too. directv was a key holdout. in its lawsuit, justice offers a sliver of fact: directv perhaps needlessly made a habit of privately assuring local cable operators in the area (cox and charter) of what it was saying relentlessly in public, namely that it wouldn<u+2019>t buckle to a requirement that the dodgers be carried on basic cable so that even non-fans would have to cover its whopping $4-plus monthly charge. to justice, all this amounted to a conspiracy that meant <u+201c>many consumers in la had fewer<u+2014>or no<u+2014>means by which to watch the dodgers channel.<u+201d> er, it actually meant that millions of tv subscribers in the los angeles area could avoid paying for games they didn<u+2019>t care to watch. it certainly didn<u+2019>t prevent time warner cable and the dodgers from finding other ways to reach their customers, which the internet age provides aplenty. to the naked eye time warner cable and the dodgers were the real monopolist here. after all, they could have offered sportsnet la as a premium channel for viewers who wanted to pay for it. they could have offered the games to fans online. they could have struck a deal with a competing satellite carrier, dish network . instead, they demanded a hoary cable-like arrangement that would tax all viewers for the benefit of a minority. in essence, justice here is trying to prop up the traditional cable bundle by helping twc force customers of its rivals to pay for twc<u+2019>s arguably overpriced bet on the dodgers. naturally, justice<u+2019>s jonathan sallet doesn<u+2019>t specifically say that<u+2019>s the purpose. he fills his complaint with blather about how justice is sticking up for a <u+201c>beloved<u+201d> local sports franchise. but one should not fail to notice something else. while the dodger fight was dragging on, directv was acquired by wireless giant at&t , which recently struck an even bigger deal to acquire the other time warner, not the cable operator but the owner of entertainment businesses like cnn, hbo and the warner bros. studio. justice is angling to be the main vetter of the deal, which, like all giant media mergers, is not only politically controversial but a juicy career opportunity for trustbusters. donald trump said during the campaign he would oppose it. notably mr. sallet served in the obama federal communications commission while the net-neutrality fight was going on, which was about (in very similar fashion) making sure broadband subscribers who don<u+2019>t watch netflix still have to pay for netflix<u+2019>s bandwidth demands. so what will be the at&t-time warner deal<u+2019>s fate? this has become the biggest guessing game in business. if republican antitrust prevails, it will fly through because the parties aren<u+2019>t competitors and, indeed, want to use wireless to break open the relatively uncompetitive market for cable tv. if trumpian antitrust prevails, it may depend on whether cnn has lately run an unflattering story about president trump. and if trumpian antitrust has an affinity for obama antitrust<u+2014>which seems all too possible<u+2014>then the deal is doubly in trouble. nobel laureate ronald coase once said trustbusters see monopoly lurking behind every business arrangement they don<u+2019>t understand. directv<u+2019>s stance threatens a status quo in which expensive local sports rights are carried on the basic tier, forcing all subscribers to pay for the habits of professional sports addicts. and if there<u+2019>s one thing obama antitrust has opposed, it<u+2019>s whatever threatens a well-funded status quo.
the l.a. dodgers could help kill the at&t merger - wsj
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