The Federal Communications Commission has helped clear the path for AT&T to buy Time Warner Inc. without a lengthy public-interest review.
The FCC conducts public-interest reviews of mergers when FCC licenses are transferred, but AT&T and Time Warner have been trying to structure their $85.4 billion deal to avoid direct transfer of any licenses. That means Time Warner has to get rid of its FCC licenses, including one for a TV station in Atlanta, before it’s swallowed up by AT&T.
The FCC helped Time Warner achieve that this week by approving a sale of its WPCH-TV license in Atlanta for $70 million to Meredith Corp., which was already operating the station for Time Warner under a separate agreement.
FCC Chairman Ajit Pai has said the commission does not have “the legal authority to review the [AT&T/Time Warner] transaction” because AT&T isn’t taking over any Time Warner licenses, despite pushback from Senate Democrats and the FCC’s lone Democrat, Mignon Clyburn.
Time Warner is the owner of programmers such as HBO, CNN, and Turner Broadcasting System. The Time Warner that AT&T is buying is completely separate from Time Warner Cable, the ISP that was purchased by Charter last year.
Democrats say merger will bring higher prices
The Department of Justice could sue to block the AT&T/Time Warner merger on antitrust grounds, but the FCC reviews deals based on a different “public interest” standard that forces the merging companies to prove that the deal is good for consumers. Since there won’t be a full FCC review, Senate Democrats led by Al Franken (D-Minn.) recently asked AT&T to prove that the acquisition will benefit Americans. AT&T responded that the merger will provide consumers with “more relevant advertising in ad-supported video services,” more attractive bundles of broadband and video, and other benefits.
Senate Democrats and other critics of the merger have said a combined AT&T and Time Warner might either restrict access to programming or charge rival TV providers a higher price to carry it, which would in turn raise customers’ cable TV bills. They’ve also said that the merger could help AT&T expand its strategy of exempting its own video from its mobile data caps while charging rivals for the same privileged treatment.
Even Donald Trump claimed on the campaign trail that his administration will not approve the merger “because it’s too much concentration of power in the hands of too few.” After he became president, Trump appointed a Justice Department antitrust chief who previously said the AT&T/Time Warner deal doesn’t present a major antitrust problem.
Time Warner also has dozens of FCC licenses that let programmers such as HBO, CNN, and Turner upload video to satellites used by pay-TV companies. We’ve asked the FCC and Time Warner about the status of those licenses and will provide an update if we get one. A story in Deadline suggests that the licenses “might not have to be sold to AT&T or can be replaced by distribution technologies that don’t use the public airwaves.”