Politicians Flag AT&T-Time Warner Antitrust Concerns

AT&T’s planned takeover of Time Warner mirrors Comcast’s successful acquisition of NBC Universal, but the new pairing may face a rockier path through Washington as Democratic and Republican presidential contenders, along with key lawmakers, express skepticism, according to Bloomberg. “An acquisition of Time Warner by AT&T would potentially raise significant antitrust issues,“ Senators Mike Lee, a Republican from Utah, and Amy Klobuchar, a Minnesota Democrat, said in a joint statement on Sunday.

The pair are the chairman and ranking member, respectively, of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights. The panel will hold a hearing on the merger some time in November, they said. A date is yet to be determined; it’s unclear if the hearing will be before or after the Nov. 8 election.

Hillary Clinton “certainly thinks regulators should look at it,“ spokesman Brian Fallon told reporters in Raleigh, North Carolina, where the Democratic presidential nominee was campaigning. Republican Donald Trump said Saturday he would block the deal, and is ramping up criticism of media concentration in general.

Even though the deal would combine programming and distribution rather than two direct competitors, the takeover still raises potential antitrust problems, said John Bergmayer, senior counsel at Public Knowledge, a Washington-based policy group. AT&T could make it difficult for competitors to get Time Warner programming, hoping to drive customers to its own platforms, while DirecTV could decline to carry rival programming, he said.

Similar concerns were raised by the U.S. Justice Department and the Federal Communications Commission when Comcast agreed to buy NBC. Officials said the deal gave the cable company an incentive to disadvantage competitors by denying them access to NBC programming or raising their licensing fees. Whether Comcast’s pay-TV rivals refused to purchase the programming or agreed to pay the higher fees, Comcast would benefit from weakening its competitors, the government said. Higher licensing fees would also induce customers to switch to or stay with Comcast, it said.

AT&T and Time Warner said Saturday that by combining they will be able to compete nationwide with cable companies by bundling mobile broadband and video. If the companies can persuade regulators that that is the case, it might improve the odds of approval with conditions, said Amanda Wait, an antitrust lawyer at Hunton & Williams LLP in Washington. Still, AT&T will receive close scrutiny from regulators, lawmakers and state attorneys general, she said. “This is going to be a multi-front war,“ she said.

Time Warner holds an airwaves license for a TV station in Atlanta, potentially giving the FCC power over the deal in a review that wouldn’t happen until after the Nov. 8 presidential election. The merging companies might be able to sell the station, WPCH, to avoid FCC scrutiny, said Andrew Jay Schwartzman, an instructor at Georgetown University’s law school in Washington.

Clinton, who holds a significant lead in the polls as the Nov. 8 election nears, has been critical of megamergers. Trump, meanwhile, broke with Republican orthodoxy by saying he would block the Time Warner acquisition, arguing that such deals leave power concentrated among too few companies. He also suggested he would favor a break up of Comcast and NBC.

“Donald Trump will break up the new media conglomerate oligopolies that have gained enormous control over our information, intrude into our personal lives, and in this election, are attempting to unduly influence America’s political process,“ Peter Navarro, a senior economic adviser to the campaign, said in a statement.

Democrats added a commitment to toughen antitrust enforcement in their party platform this year for the first time since 1988, while Clinton in campaign literature calls for “reinvigorating“ antitrust enforcement. Clinton, who applauded recent challenges to two health-insurer mergers, called for robustly enforcing antitrust laws to prevent “excessive, harmful economic power.“ She also promised more resources and staffing at antitrust agencies.

Clinton’s running mate, Senator Tim Kaine of Virginia, said on NBC’s “Meet the Press’ that he shared “concerns and questions“ raised by fellow Senator Al Franken, Democrat of Minnesota. Franken, a member of the antitrust subcommittee, said in a statement that huge media mergers “can lead to higher costs, fewer choices, and even worse service for consumers.“ “Market place competition is a good and healthy thing for consumers. And so there are a number of questions and concerns that rise in that vein about this announced deal,“ Fallon, the Clinton campaign spokesman, said in a statement.

Even though Comcast won approval for NBC, antitrust officials at the Justice Department made clear they were ready to rethink their approach to evaluating harm to competition from mergers when, four years later, they opposed Comcast’s proposed takeover of Time Warner Cable. The Justice Department looked past the fact that the companies’ cable operations didn’t overlap and found potential harm to online video competitors because the combined company would control much of the market for high-speed internet service.