November 2016

Behind the Time Warner campus in Atlanta (GA), more than a dozen massive dishes silently stream CNN newscasts, Cartoon Network shows and Turner Sports games to satellites in outer space. They’re a vital link in the media giant’s global news and entertainment business. But they operate under licenses from the Federal Communications Commission, which means they also could be the biggest threat to Time Warner’s aspirations to merge with AT&T.

Time Warner has dozens of FCC licenses. Transferring them to AT&T would trigger a review by the agency, and the company is looking for ways to avoid that, according to a person familiar with the situation. Otherwise, the $85.4 billion deal could be exposed to an agency that’s been a graveyard for mergers. In theory, Time Warner could sell its dishes to an unaffiliated third party and enter into a contract with them for the same services -- but in that case, the buyer would need to ask the FCC for a license to provide services in the same location over the same airwaves, said Andrew Jay Schwartzman, senior counselor at the Georgetown University Law Center in Washington. It’s possible the FCC would accept the application without a fuss, Schwartzman said. But, he said, FCC officials also might say, “Wait a minute! We’re not stupid -- you are evading this review.”

A Federal Trade Commission staff report provides an in-depth assessment of evolving business models that rely on Internet and app-based “sharing economy” platforms used by millions of Americans. The report summarizes a June 2015 FTC public workshop and highlights a number of competitive benefits and potential consumer protection challenges posed by disruptive business models in markets such as for-hire-transportation and short-term lodging.

The report, The “Sharing” Economy: Issues Facing Platforms, Participants, and Regulators, details how buyers and sellers are increasingly using internet-connected devices – smartphones and tablets – to access a matchmaking platform that allows them to search for new services, secure a price point, and complete a transaction. It discusses several “trust mechanisms,” such as reputation rating systems or money-back guarantees, which help build trust between buyers and sellers, as well as providing confidence that a transaction will proceed as agreed online. The report summarizes concerns expressed by state and local regulators and stakeholders that sharing economy platforms enable new entrants to evade regulations designed to protect consumers and promote public safety. In exploring the tension between the potential competitive benefits that sharing economy business models may provide and the potential consumer harms that they may pose, the report draws on the FTC’s expertise as both a competition and a consumer protection agency.