After 100 Years As A Bullying Gatekeeper, AT&T Pivots To Whining Unironically About Bullying Gatekeepers

(Mis)Uses of Technology

from the comes-around-goes-around dept

For decades, incumbent broadband and television giants like Comcast and AT&T enjoyed life from a comfortable position of monopoly dominance. If you want to subscribe to broadband, such companies are often your only option. If you wanted to subscribe to television service, you were required to rent a locked down, highly proprietary cable box courtesy of the industry’s cable hardware monopoly. Are you a broadcaster and want to have your cable channel in a conspicuous position in the lineup? Expect headaches. Want to use their utility poles to build a decent competitor? Expect a lot of bullshit.

Natural monopolies are a pain in the ass. Telecom monopolies like AT&T, whose domination spans the better part of a century, are a very particular type of pain in the ass. But with cord cutting and the rise of streaming changing at least part of their business equations, it’s interesting to watch how these giants of yesterday are now struggling to adapt to a new era in which they not only no longer dominate, but often have to collaborate.

Case in point. Before its 2015 merger with DirecTV and 2018 merger with Time Warner, AT&T — a company with a thirty year track record of obvious, documented, monopolistic behavior — told anybody who’d listen that there was simply no way that the company would use the greater scale from its merger ambitions to behave badly.

While U.S. District Court Judge Richard Leon bought into that nonsense, AT&T quickly set about proving to everybody that critics were right to worry. It set about abusing its broadband monopoly to thwart streaming competitors, drove up TV prices on consumers and competitors alike, and began withholding HBO content from competitors. All things it swore to the courts it wouldn’t do, and all while its lobbyists set about dismantling consumer protections (like net neutrality rules) designed specifically to thwart this kind of behavior.

As AT&T attempts (poorly) to pivot toward the cord cutting generation, the company is suddenly finding itself in an alien predicament: it has to innovate, collaborate, and compete. But with companies like Roku and Amazon now dominating the streaming hardware space, AT&T’s been having a hard time bullying them into carrying its streaming platform. In turn, AT&T has gotten a bit pouty as it tries to explain why, despite all this bullying, posturing, bullshit, and market domination, it still managed to lose nearly 1 million TV subscribers last quarter and nearly four million subscribers in just the last few years:

“AT&T?s chief executive, John Stankey, had some harsh words for Amazon on the earnings call after the report. ?We?ve tried repeatedly to make HBO Max available? on Amazon, he said. ?Unfortunately, Amazon has taken an approach of treating HBO Max and its customers differently than how they?ve chosen to treat other services and their customers.”

Not that intellectual consistency is a thing we do anymore in the United States, but some observers justifiably found AT&T’s whining a bit ironic:

Maybe it’s just me, but a 30 year natural monopoly gatekeeper that just got done lobbying to kill net neutrality rules (designed to ensure AT&T couldn’t abuse its broadband monopoly) pivoting unironically to complaining about unfair treatment is… kind of funny?

The truth is that while Stankey tries to blame Amazon for its predicament, most of AT&T’s wounds are self-inflicted. Despite the company getting a $42 billion tax break from the Trump administration in exchange for doing less than nothing, and despite billions more in Trump administration regulatory favors designed to protect AT&T’s dominance (like neutering the FCC from within or killing broadband privacy rules), and despite spending $150 billion on megamergers to dominate the sector… AT&T’s still losing pay TV subscribers hand over fist.

Why? One, because AT&T’s streaming market entry strategy was such a confusing branding mess, it wound up confusing even the company’s own employees. Two, because the bullying strategies that work in the uncompetitive broadband sector, don’t work in a sector with actual competition, and a need for innovation and collaboration. Three, because AT&T spent $150 billion on mergers, then tried to extract that money from its customers in the form of rate hikes, seemingly oblivious that the entire point of “cord cutting” and streaming for the end users is greater flexibility at lower costs.

The lion’s share of AT&T’s troubles right now are self-inflicted, yet a natural monopoly whining about being treated unfairly does at least bring some much needed entertainment value during these dark times.

Filed Under: competition, gatekeeper, hbo max, john stankey, streaming, streaming tv
Companies: amazon, at&t