How AT&T’s Time Warner acquisition will impact cord-cutters

On Tuesday, a federal judge granted AT&T’s longstanding wish to acquire Time Warner.

The purchase will combine a major provider of internet and TV service with a major media conglomerate that owns television networks, studios, and entertainment properties. (Time Warner is not to be confused with Time Warner Cable, which was spun off from the media business in 2009, and then merged with Charter in 2016 to become Spectrum.)

While the U.S. Department of Justice argued that the mega-merger will create unfair competition for other TV providers, who might need to pay more for access to AT&T’s content, Judge Richard Leon disagreed, accepting AT&T’s argument that owning its own media company is necessary to take on new video entrants like Netflix, Facebook, and Google.

At the moment, it’s unclear whether the government will appeal the case. But assuming the merger proceeds, we can already predict what it could mean for cord-cutters. In the short term, the merger might provide some consumer benefits, as AT&T upholds the promises it made while pitching the public on its plans. But those benefits will come at a cost, as more companies that control your internet access gain a tighter grip on the content flowing through their pipes.

Here’s what to expect now:

You’ll get at least one new streaming service

AT&T has said that if the merger goes through, it will launch a new $15-per-month streaming service, called AT&T Watch, which will be free to the company’s wireless subscribers. Presumably AT&T will make good on that promise now, though it’s unclear how compelling the service will be. AT&T CFO John Stephens has described the service as a “very low end, very thin collection of products,” consisting of “some of the Turner video channels … and a small number of other channels,” but neither he nor AT&T in general has gone into specifics.

Keep in mind that AT&T has dangled the promise of cheap TV service before, only to change its terms later. Before DirecTV Now launched in 2016, Stephenson said it would include more than 100 channels for $35 per month. That turned out to be a limited time offer; the same bundle of channels now costs $60 per month.

AT&T customers could get more free (or cheap) TV

AT&T already gives away HBO with a couple of its unlimited wireless service plans, and its HBO and Cinemax add-ons through DirecTV Now are cheaper than other streaming bundles at $5 per month each. Now that it owns Time Warner, AT&T seems likely to continue offering those deals, and could look to tie in Turner-owned streaming services such as Bleacher Report Live, Filmstruck, and Boomerang.

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