With only the Justice Department having to sign off on the AT&T-Time Warner merger, legislators who would ordinarily be targeting the FCC and its public interest review of deals are focusing their opposition on Justice's antitrust review.
In a joint letter to attorney general Jeff Sessions, almost a dozen Democratic senators called on the department to reject the $85 billion merger "if it determines that the significant harms to American consumers arising from the deal outweigh any alleged benefits."
That "if" saves it from outright opposition, though they suggested that "if" should be a "when." The Justice Department traditionally will seek to block or condition a deal whose competitive harms outweigh the benefits, but the senators did not confine their ask to competitive harms, though Justice is supposed to confine its review to competition issues.
“While we cannot possibly predict all the harms that could arise from this deal, we maintain that AT&T's proposed acquisition of Time Warner would result in higher prices, fewer choices, and worse service for consumers,” they wrote. “We hope you'll take a stand for U.S. consumers and businesses and closely scrutinize the transaction. Should you determine that the substantial harms arising from the transaction outweigh the purported benefits, we urge you to reject it.”
Presidential candidate Donald Trump signaled his Justice Department would not approve the deal to let big media companies—including one owning CNN, which he has branded as fake news—get bigger, but President Trump has not echoed that threat.
The senators say the deal has all the earmarks of an anticompetitive combo. "AT&T is one of the nation's leading distributors of content, with 135 million wireless subscribers and 25.5 million pay-TV subscribers," they wrote. "Time Warner is one of the nation's largest media companies and owns high-rated programming, including HBO, TNT, TBS, CNN, and Wamer Bros. Combining these behemoths would create a mega media conglomerate with both the incentive and the ability to favor its own content over that of other entertainment companies and to restrict competing video distributors from accessing that content, harming its competitors and ultimately consumers."
They conceded that the companies had suggested some consumer benefits but said "they have thus far failed to demonstrate that these purported benefits are either merger-specific or sufficient to outweigh the substantial harms of the deal."
In addition to Sen. Al Franken (D-Minn.), signing onto the letter were Sens. Ed Markey and Elizabeth Warren (both D-Mass.), Ron Wyden (D-Ore.), Richard Blumenthal (D-Conn.), Jeff Merkley (D-Ore.), Bernie Sanders (I-Vt.), Maria Cantwell (D-Wash.), Sherrod Brown (D-Ohio), Tammy Baldwin (D-Wis.), and Cory Booker (D-N.J.).
The FCC is not reviewing the deal because it has been structured so that no FCC licenses change hands, including by spinning Time Warner's lone TV station beforehand.
“We’ve addressed all of the issues raised by this letter in AT&T’s and Time Warner’s testimony before the Senate Judiciary Committee last January, in our February 2017 response to this same group of Senators, as well as in the extensive review of this transaction currently in process at the Department of Justice," said an AT&T spokesman. "Specifically, we’ve highlighted how our merger is about giving consumers more choices, not less. Our DIRECTV NOW product is s small example of how we can provide consumers more control over the content they purchase, and how, where and when they view content. We have also detailed how the transaction will expand distribution and creative opportunities for diverse and independent voices. Finally, we continue to believe that free data services are a huge consumer benefit that saves consumers money."
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