$89 Billion AT&T, Time Warner Merger Approval Looking Likely Despite Trump Pledge To Block Deal

Deals

from the merge-ALL-the-things dept

Needless to say, consumer advocates and smaller competitors aren’t too keen on AT&T’s $89 billion plan to acquire Time Warner. They argue that AT&T’s long history of unethical behavior, empty promises, and anti-competitive shenanigans make it extremely likely the company will use its greater size and leverage to ill effect. They worry that AT&T will make it harder for competitors to license content necessary to compete with AT&T’s DirecTV Now streaming service, and arbitrary usage caps and other tricks like zero rating to similarly put competitors at a disadvantage.

Traditionally, these kinds of vertical integration deals aren’t blocked because it’s harder to clearly prove potential antitrust harm, even if AT&T has a thirty-year documented history of all manner of fraudulent behavior. On the campaign trail, Trump repeatedly promised that this was a deal his administration simply would not allow, given the “concentration of power” the deal would deliver:

“In 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, of course, said a lot of things on the campaign trail, including promising to break up Comcast’s already-completed 2011 acquisition of NBC, something Trump couldn’t have done even if he wanted to. And while some thought that Trump’s disdain for Time Warner-owned CNN would throw a wrench in the deal works, there’s no indication that’s going to happen. AT&T has already streamlined its chances for the deal by selling any assets that would have triggered an FCC review, and Trump subsequently appointed a DOJ antitrust boss on record stating he has no problem with the deal.

The fact that Trump’s FCC has become a rubber stamp for every shitty idea coming out of AT&T’s, Verizon’s and Comcsast’s collective heads should also likely clue people into which direction deal approval was leaning.

So not too surprisingly, media reports on the progress of the merger talks indicate AT&T’s conversations with antitrust officials have shifted from whether the deal will be approved to finalizing what, if any conditions will be affixed to the deal:

“The early-stage discussions suggest that government lawyers have nearly finished their months-long look at how AT&T, the biggest pay-TV distributor, would reshape the media landscape with its bid for the owner of CNN and HBO — and shows that the sides have moved on to talking about how they can make the merger work without harming rivals.”

More accurately, they’ve moved on to talking about how they can make it appear that the merger could work without harming rivals, since, as we’ve long documented, the conditions affixed to these kinds of deals are traditionally only theatrical in nature. More often than not, the conditions are proposed by these telecom companies themselves, often requiring that companies do something they’d already planned to do anyway. In AT&T’s case, it usually involves fudging their existing broadband deployment numbers, then promising a new broadband expansion that may or may not actually materialize.

We’ve documented how AT&T in particular is a long-standing professional at making all manner of bullshit promises if their mergers get approved, with regulators never really learning much of anything with hindsight. With Trump being no stranger to flimsy telecom promises of his own (his promise to block this deal being example A), the merger’s going to create a wonderful opportunity for bullshit synergies the likes of which we may never see again.

Filed Under: antitrust, competition, doj, donald trump, fcc, merger
Companies: at&t, time warner