Telecom Convergence: Nirvana or Nightmare?

by Hogan Lovells
Contact

I’m currently watching a wonderful new show called “The Marvelous Mrs. Maisel,” on Amazon Prime.  It’s a comedy about a recent divorcee in Manhattan in the early 1960s who decides to become a stand-up comedian.  As I’m watching the show my thoughts drift to the magnitude of difference between the fictitious Midge Maisel watching Bob Newhart on her 1960s-era television and my present day Sunday night viewing experience.

Gone are the days of black and white television and three primary broadcast television stations.  Today, many consumers can chose among hundreds of television channels offered through cable or direct broadcast satellite subscriptions.  Aficionados can also access boundless archived and original content through online distributors such as Amazon, Hulu, Netflix, and YouTube, with multiple business models, from subscription video-on-demand (VOD) services to “virtual” MVPDs offering linear television in smaller packages.  Television watchers can consume content anywhere, including on their phones, tablets and other devices.

Convergence—the consolidation or synergism of previously distinct systems and functionalities–is creating all sorts of new opportunities for telecom providers and content creators.  But with new opportunities come new challenges.  Last month, lawyers, policymakers and analysts gathered at Hogan Lovells’ Sixth Annual Winnik International Telecom and Internet Forum to discuss convergence and competition in the communications industry.

One of the most interesting topics of discussion during the day was antitrust review in the age of telecommunications convergence.  Traditional thinking is that so-called “vertical” integration, or combinations involving companies in different segments of the supply chain, raises fewer competition concerns than horizontal combinations involving direct competitors.  For example, when the European Union blocked Telefónica UK’s O2 and Hutchison 3G UK’s Three from merging last year, it acknowledged convergence of mobile and fixed communications as a trend in the industry but maintained a distinct delineation between the retail market for mobile telecommunications services and the retail markets for fixed telecommunications and over-the-top services.

The traditional horizontal/vertical distinction in antitrust review may be changing.  Recently, the US Department of Justice sued to block AT&T’s proposed merger with Time Warner.  According to DOJ, the combined entity would be able to raise costs for video distributor rivals and “hinder the growth of online distributors that [AT&T and Time Warner] view[ ] as a threat to the traditional pay-TV model.”  DOJ has alleged that AT&T and DirectTV would have the ability and incentive to raise costs for “must-have” Time Warner programming such as HBO, CNN, TBS and TNT for other traditional multichannel video programming distributors (MVPDs), such as Comcast and DISH Network, as well as virtual MVPDs (such as DISH Network’s Sling TV) and subscription VOD providers such as Netflix and Amazon Prime.

Convergence is creating additional potential regulatory pitfalls as well.  Restrictions on foreign investment, regulations that previously applied only to certain segments of the industry (such as cross-ownership and content-based restrictions imposed solely on broadcast media ) and other policies such as net neutrality and privacy must all be re-evaluated for continued usefulness and effectiveness as the industry evolves.

Midge Maisel’s simpler times of three channels on the TV dial and a dearth of choices are far behind us.  The question now is whether convergence will lead to entertainment nirvana or a world full of regulatory nightmares.  I for one have my popcorn handy and am ready for the show.

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.

© Hogan Lovells | Attorney Advertising

Written by:

Hogan Lovells
Contact
more
less

Hogan Lovells on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.