Enlarge / AT&T will own a bunch of new media properties if it is allowed to buy Time Warner.Aurich Lawson
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AT&T is reportedly feeling confident about its ability to buy Time Warner after meeting with President-elect Donald Trump’s transition team—even though Trump himself vowed to block the merger during his campaign.
“Donald Trump’s transition team has reassured AT&T that its $85.4 billion acquisition of Time Warner will be scrutinized without prejudice,” the Financial Times reported yesterday. “After talking with the president-elect’s team, AT&T executives are confident that their deal has a good chance of passing regulatory scrutiny, people informed about the conversation said.”
Time Warner, the programming company that owns CNN and HBO, is a separate entity from Time Warner Cable, the ISP that was recently purchased by Charter Communications.
Trump railed against AT&T’s proposed purchase of Time Warner during a campaign speech in October. “As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” Trump said at the time. In that speech, Trump complained about the media’s coverage of his campaign.
But it wouldn’t be a surprise to see Trump back down from his pledge to block the AT&T/Time Warner merger. AT&T is encouraged by Trump appointing “former competition officials with a hands-off record on antitrust enforcement” to his transition team, AT&T sources told the Financial Times.
That includes former Federal Trade Commission member Joshua Wright, who criticized “[t]he new anti-merger fervor” in a recent New York Times opinion article, saying that anti-merger sentiments are based on a false presumption that mergers always lead to higher prices instead of cost savings and product improvements.
As he prepares to shift the Federal Communications Commission from Democratic to Republican control, Trump has also appointed advisors who want to reduce regulatory burdens on telecom companies. That’s likely good news for telecom companies that want to increase consolidation and face fewer consumer protection regulations.
While it isn’t 100 percent certain that the FCC will have a chance to review AT&T/Time Warner, a liberal Justice Department and FCC could be expected to scrutinize the deal on several grounds. As we’ve written in previous articles, owning Time Warner would give AT&T incentive to raise the prices that its rivals (such as Comcast, Charter, and Verizon) pay to distribute Time Warner programming on their cable TV systems, which could indirectly raise consumers’ TV bills. AT&T could also harm online video services that compete against DirecTV by charging them higher prices for content or refusing to license videos. As it does with DirecTV, AT&T could favor Time Warner video on its mobile network by letting it stream without counting against the data caps applied to video services like Netflix.
Though President Obama’s FCC allowed AT&T to buy DirecTV last year, it prevented AT&T from buying T-Mobile in 2011 and Comcast’s attempt to buy Time Warner Cable in 2015. The FCC also recently said that AT&T may be violating net neutrality rules by allowing DirecTV video to stream without counting against mobile data caps while charging other companies for the same privilege.
But under Trump, those net neutrality rules could be overturned, and AT&T could end up securing another big merger approval.

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