White House contest casts shadow over mega-deal

White House contest casts shadow over mega-deal
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Presidential politics are casting a shadow over the biggest media acquisition of the year.

The outcome of the White House race could help determine the fate of the proposed $85 billion sale of Time Warner to telecommunications behemoth AT&T, an unusual situation for a massive sale.

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“It’s such an interesting thing about this deal, is the fact that it was announced when it was announced,” said Craig Aaron, president of Free Press, which argues the deal would be bad for consumers.

“I think this would be a highly controversial deal whenever it happened, but the fact that it’s happening two weeks out from the election and will be decided by … appointees who nobody knows who they are yet, makes this a much more political fight than maybe it would have been if it had happened at another time.”

Neither of the presidential hopefuls has spoken kindly of the proposal.

Donald TrumpDonald John TrumpCNN's Camerota clashes with Trump's immigration head over president's tweet LA Times editorial board labels Trump 'Bigot-in-Chief' Trump complains of 'fake polls' after surveys show him trailing multiple Democratic candidates MORE, the Republican nominee, took a hard line against the deal even before it was formally announced.

“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,” he said from the campaign stump Saturday.

Trump and his campaign have also criticized the combination of NBCUniversal and cable company Comcast, which has been compared to the AT&T-Time Warner deal.

Democratic nominee Hillary ClintonHillary Diane Rodham ClintonTrump complains of 'fake polls' after surveys show him trailing multiple Democratic candidates Hillary Clinton responds to Trump tweets telling Dem lawmakers to 'go back' to their countries The Young Turks' Cenk Uygur: Here's how to choose a president MORE’s campaign hasn’t taken a firm stand on the acquisition, but it has expressed skepticism about it.

“Generally, pro competition and less concentration, I think, is generally helpful, especially in the media,” Sen. Tim KaineTimothy (Tim) Michael KaineAcosta defends Epstein deal, bucking calls for resignation Republican lawmakers on why they haven't read Mueller report: 'Tedious' and 'what's the point?' Schumer calls on Acosta to step down over Epstein MORE (D-Va.), Clinton’s running mate, said Sunday on NBC’s “Meet the Press.”

Randall Stephenson, AT&T’s CEO, said at a conference on Tuesday that the comments from Kaine and Trump were “uninformed.”

“Anybody who characterizes this as a means to raise prices is ignoring the basic premise of what we’re trying to do here,” he said at the Wall Street Journal event, according to the Hollywood Reporter.

Many of Clinton’s top progressive supporters — including Sen. Bernie SandersBernie SandersTrump complains of 'fake polls' after surveys show him trailing multiple Democratic candidates The Hill's Morning Report - Presented by JUUL Labs - Trump attack on progressive Dems draws sharp rebuke Judd Gregg: Counting the costs of Democrats' desires MORE (I-Vt.) and Sen. Al FrankenAlan (Al) Stuart FrankenThe Hill's 12:30 Report: Mexican officials scramble to avoid Trump tariffs The Hill's Morning Report - Tariff battle looms as Trump jabs 'foolish' Senate GOP Barbs start to fly ahead of first Democratic debate MORE (D-Minn.) — are dubious about the deal or want it stopped outright. Franken, in a letter this week, said he wanted it to receive the “highest level of scrutiny” from regulators.

AT&T originally planned to finish the deal after the elections, Fortune reported this week, but moved quickly after word of its negotiations with Time Warner leaked last week. It confirmed the transaction on Saturday night.

AT&T did not respond to an email asking for comment.

Reviews of these deals are often lengthy, which means the decision on whether to approve the acquisition is nearly certain to come in 2017. The companies say they expect the deal to close by the end of next year.

President Obama’s successor will be filling positions related to antitrust enforcement, including at the Justice Department, which is likely to see a new attorney general and antitrust head next year.

The Federal Communications Commission (FCC) may also play a role in the review, depending on whether AT&T decides to buy broadcast license from Time Warner. There are also two open seats on the Federal Trade Commission (FTC), which pursues antitrust cases.

“All of these jobs are jobs that will be filled, and topic 1-A is going to have to be this proposed merger,” Aaron said.

Spokesmen for the FCC and FTC both declined to comment. A spokesman for the Justice Department did not respond to a request for comment.

The campaign trail rhetoric presages a lengthy battle over the deal that is likely to involve an army of lobbyists and millions of dollars.

The central question is whether the same company should be able to own both large content companies and the means through which that content is distributed. AT&T controls a sprawling wireless network and is also a major provider of video services through its subsidiary, DirecTV. The deal would give it control over, among other properties, CNN, HBO and Warner Bros.

Public interest advocates say that arrangement would allow AT&T to give preferential treatment to its own content. Some have said the deal raises questions about so-called zero-rating programs, in which wireless providers give customers free data when they access certain content. Advocates say those arrangements violate net neutrality.

Skepticism about the deal extends to liberal lawmakers in Congress, as well as some conservatives.

The companies argue that since they are not in the same business, their combination raises few antitrust concerns. That’s a case they’ll make aggressively in Washington.

AT&T spent more than $16 million on lobbying last year and is regularly among the top federal spenders across industries, according to data compiled by the Center for Responsive Politics.

Advocates for AT&T will mobilize to make the case that the acquisition of Time Warner should move forward, perhaps with conditions to address any competition concerns raised by regulators.

“We look forward to discussing the many benefits of this transaction with our regulators,” said David McAtee, AT&T’s general counsel. “In the modern history of the media and the Internet, the U.S. government has always approved vertical mergers like ours, because they benefit consumers, strengthen competition, and, in our case, encourage innovation and investment.”

“It is a classic vertical merger,” said AT&T CEO Randall Stephenson this weekend. “They are typically always dealt with by remedies, concessions if you will, and conditions imposed on a combination.

“That’s our anticipation.”