On the heels of AT&T’s planned acquisition of Time Warner, the Federal Communication Commission has passed a new set of privacy rules that will regulate internet service providers (ISPs) and other telecom companies. The new rules require companies to ask a customer’s permission before using their data for advertising reasons.
"There is a basic truth: It is the consumer's information,” Tom Wheeler, chair of the FCC, said of the new regulations, according to Politico. “It is not the information of the network the consumer hires to deliver that information. What this item does is to say that the consumer has the right to make a decision about how her or his information is used. "
“At the end of the day, consumers desire services which shift costs away from them and towards advertisers,” Bob Quinn, a senior vice president at AT&T, responded. “We will look at the specifics of today's action, but it would appear on its face to inhibit that shift of lower costs for consumers by imposing a different set of rules on ISPs."
AT&T, one of the nation’s largest Internet and cellular service providers, is believed to be acquiring Time Warner for the company’s vast media holdings. The price tag for Time Warner could top $84 billion.
Time Warner owns, among other holdings, CNN, HBO, and Warner Bros. studio. AT&T is the owner of DirecTV.
“We have always believed that the combination of content and distribution makes sense,” Alan Gould, an analyst at Brean Capital, told Bloomberg. Time Warner “has been the greatest content factory for films and TV. Given the rapidly evolving distribution universe, we believe content ownership could be beneficial.”
But beyond the new FCC regulations, the deal itself will face heavy scrutiny by the agency.
“The wild card in all this will be the FCC,” Roger Entner, an analyst with Recon Analytics, said. “It’s hard to predict what the regulators will do. They are pretty much starting with a blank page.”