from the synergies-out-the-wazoo dept
AT&T continues to try and sell regulators on the company's $100 billion acquisition of Time Warner, making all kinds of promises (few actually being true). Consumer advocates are highly wary of the deal, arguing that a more powerful AT&T (with its rich history of anti-competitive behavior and outright fraud) would be in a perfect position to hinder streaming competitors from licensing the content they need to compete. That's of course when AT&T isn't busy giving its own DirecTV Now service an unfair market advantage via zero rating and usage caps.
But AT&T's path to merger completion just got a bit easier. Outlets had been noting for some time that an FCC review would only be triggered if AT&T attempted a transfer of the two dozen or so Time Warner satellite licenses or the station license for WPCH-TV in Atlanta. Avoid those, and you avoid even a possibility that the FCC could block the deal or saddle it with conditions. And that's precisely what AT&T appears intent on doing according to a new regulatory filing with the SEC:
“Time Warner has conducted a review of all licenses that it holds that are granted by the FCC,” says the company. “While subject to change, it is currently anticipated that Time Warner will not need to transfer any of its FCC licenses to AT&T in order to continue to conduct its business operations after the closing of the transaction.”
If, as AT&T contends, these licenses don’t need to be transferred — or if Time Warner divests itself of the licenses before merging — the companies seem to believe the FCC has no authority to intervene and review the merger.
The deal would still need approval from the Justice Department, but Donald Trump remains a bit of a wild card in AT&T's equation. Trump promised to block the deal in the lead up to the election, claiming "it's too much concentration of power in the hands of too few." But Trump's telecom transition team consists largely of folks interested in defunding and defanging regulators. These aren't exactly the kind of folks who'll be supporting government blockades of (or restrictive conditions attached to) telecom sector mega mergers. Neither is the most likely top FCC choice, Ajit Pai.
But there's a wrinkle. Trump may still block the deal, just for reasons other than what he claimed on the campaign trail. A recent New York Magazine column on Megyn Kelly contained an interesting tidbit, noting that Trump has turned to News Corporation boss Rupert Murdoch for tips on choosing the next FCC boss. Murdoch's also urging Trump to block the deal as a favor to Murdoch and his obvious competitive interests:
If Fox News’ politics ultimately solidify as more pro-Trump than they were during the campaign, that might be to the benefit of Murdoch’s business interests. According to a well-placed source, Trump has asked Murdoch to submit names for FCC Chairman. Murdoch, another source said, also wants conditions put on the AT&T-Time Warner merger, and he could lobby Trump to make that happen.In other words (assuming this report is correct), Trump could block the deal, but only to benefit Murdoch's own news empire, and not because it would protect consumers, smaller competitors, or the media and streaming markets. There's another possible factor as well. Bloomberg recently reported that Trump was opposed to the deal, but mainly because he's still bitter about CNN's coverage of his campaign -- and CNN is, of course, part of Time Warner. So there are still more "personal" reasons why Trump may want to block the merger. That's going to likely cause friction among Trump's own telecom sector and tech appointees, who have made it abundantly clear they don't want regulators doing much of anything outside of nodding dumbly and looking busy.
Regardless, AT&T remains publicly optimistic, insisting there's just no way regulators would dare block its latest megamerger; it's simply too fantastic:
"In the modern history of the media and the internet, the U.S. government has always approved vertical mergers like ours, because they benefit consumers, strengthen competition, and, in our case, encourage innovation and investment," AT&T executive VP and general counsel David McAtee said of the transaction.