Netflix seems to be gaining quite a bit of political clout with the FCC. Instrumental in shutting down the Comcast Time Warner mega-merger, Netflix now has set its sights on the $48 billion merger between AT&T and DirecTV.
Netflix doesn’t oppose the merger fundamentally; however, they have urged the FCC to reject the merger unless changes are made to eliminate competitive concerns. Netflix definitely has cause for concern. The merger would make AT&T the largest pay-TV service as well as a nationwide internet service provider.
With the future of net neutrality being questionable at best, AT&T could effectively hold Netflix hostage by limiting access to its handy and clean broadband subscribers. It would put AT&T and Netflix in direct competition as the largest providers of pay-TV and streaming video respectively. AT&T would become a gatekeeper to those who wish to use Netflix rather than pay for traditional TV service.
Netflix isn’t calling for the FCC to deny the merger at this time though. They are simply meeting with FCC officials to point out the conflict to competition that the merger would provide.
The FCC has thus far taken a strong stance for net neutrality and robust competition in the telecom industry. We can only hope the next election cycle brings in the same decisive leadership working for the people instead of big business.
Earlier this week, media reports indicated that two food manufacturing giants in the United States would soon merge to create a new entity that is expected to be the third largest food and beverage producing company in the nation. Kraft Foods Group, Inc will combine with H.J. Heinz Co. to form “Kraft Heinz Co.”
The merger occurred with the assistance of Berkshire Hathaway, a company owned by billionaire Warren Buffett, and 3G Capital, an international private equity firm whose creators include Brazillian billionaire Jorge Paul Lemann. Investors will furnish $10 billion in capital to the new entity. Brad Reifler (Reuters.com) has learned that the newly merged food manufacturer is expected to generate revenues approaching $28 billion annually.
Warren Buffet reportedly indicated: “This is my kind of transaction, uniting two world-class organizations and delivering shareholder value.” He added: “I am excited by the opportunities for what this new combined organization will achieve.”
Last year, Kraft suffered a number of business reverses, including a decline in profits. Alex Behring, the Chairman of H. J. Heinz, will become the Chairman of the new firm. Kraft’s Chairman and CEO, John Cahill, will become Vice Chairman of the new company and will head a Board committee dedicated to overseeing operations and strategy.
Kraft Heinz Co. plans to maintain two corporate headquarters: one in Chicago, and the other in Pittsburgh, Pennsylvania. Heinz CEO Bernardo Hees will manage the company’s operations.