Dallas-based AT&T said late Saturday the deal would need approval of the US Justice Department and the companies were determining which Time Warner US Federal Communications Commission licenses, if any, would transfer to AT&T as part of the deal. Any such transfers would require FCC approval.
AT&T has clashed with the FCC in recent years on a number of fronts. An AT&T spokesman declined on Sunday to elaborate on whether the FCC would need to formally approve the transaction. FCC spokesman Neil Grace declined to comment.
Comcast’s 2011 takeover of NBCUniversal – the last marriage of a distribution powerhouse with a major media and content provider, such as AT&T and Time Warner – was reviewed by both the Justice Department and the FCC. The FCC played a key role in that review and, by a 4-1 vote, approved the deal with significant conditions, some of which last until 2018.
Despite its big media footprint, Time Warner has only one FCC-regulated broadcast station, WPCH-TV in Atlanta. Time Warner could sell the license to try to avoid a formal FCC review, several analysts said.
But, even if AT&T acquires no licenses in the deal, BTIG analyst Rich Greenfield said the FCC still may play an indirect role in the merger review. David McAtee, AT&T senior executive vice president and general counsel, said in a statement Sunday history is on the company’s side in winning approval.
“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,” he said.
ROCKY FCC RELATIONSHIP
AT&T, which has repeatedly clashed with the FCC over the past several years over major industry regulations, said on Saturday one benefit to its buying Time Warner is that the programming company is “lightly regulated compared to much of AT&T’s existing operations.”
AT&T has criticized much of FCC Chairman Tom Wheeler’s ambitious proposed agenda, including new broadband privacy regulations, reforms to the $45-billion-a-year business data services market and a plan to allow consumers to ditch pay-TV set top boxes.
AT&T was among those who sued the FCC in 2015 to block the Obama administration’s landmark rules barring internet service providers from obstructing or slowing down consumer access to web content.
The FCC proposed fining AT&T’s Mobility unit $100 million in June 2015 for misleading customers about unlimited mobile data plans. The FCC has taken no further action to enforce the proposed fine, and the company has it would “vigorously dispute the FCC’s assertions.”
AT&T and the FCC are working together on some issues. AT&T chief executive Randall Stephenson is chairing a task force to crack down on robocalls after the FCC’s Wheeler in July urged new industry action. Both are attending a task force meeting Wednesday in Washington.
Experts expect tougher regulatory, political and consumer scrutiny of the deal compared to Comcast’s purchase of NBCUniversal. A US Senate antitrust committee plans to hold a hearing on the new deal in November. While the Comcast deal offers a potential roadmap for winning approval by agreeing to conditions, it also could lead to tougher and more enforceable conditions that opponents already are demanding.
In 2011, Comcast agreed to 150 conditions, including sacrificing day-to-day control of popular video website Hulu and making NBCUniversal programs available to competitive streaming services. Others were aimed at ensuring Comcast, as the owner of major content from NBC and various cable channels, dealt fairly with rival cable and satellite providers.
Matt Wood, policy director at public interest group Free Press said “the lessons from Comcast/NBC are that it’s hard to enforce any behavioral conditions, ever, especially in timely fashion. A remedy isn’t worth much to a competitor if it takes years in court and millions of dollars in legal fees to get it.”
John Bergmayer, senior counsel at Public Knowledge, a digital rights advocacy group, said “regulators need to anticipate how their good intentions might be thwarted … and maybe just adopt simpler conditions that leave less room for lawyering.”
Comcast declined to comment Sunday. But, in 2014, the company defended its compliance, saying “Comcast is a company that keeps its promises and plays fair.”
Greenfield said that in the Comcast deal, regulators had come to regret allowing Comcast to pledge to “behavioral conditions’ – such as equitable treatment of competitors – and viewed “structural” conditions, such as promises to sell certain assets, as easier to enforce.
“Regulators will fear that AT&T will use its distribution footprint to favor Time Warner content vs. third-parties,” Greenfield said in a note.
Source by deccanchronicle….