On Thursday, AT&T CEO Randall Stephenson spent an hour in Trump Tower, the day after President-elect Donald Trump trashed CNN, which AT&T wants to buy as part of its proposed $85 billion merger with Time Warner.
Trump is said to still oppose the deal, which he slammed on the campaign trail.
Trump’s negative view of the merger comes “partly from his frustration with CNN, which is owned by Time Warner,” according to Bloomberg.
That negative view seems to only have intensified since CNN reported on an unverified dossier of Trump that included allegations that he was compromised by Russian intelligence agents.
At a press conference Wednesday, Trump refused to take a question from CNN’s Jim Acosta.
“Not you. Not you,” Trump said. “Your organisation is terrible. Your organisation is terrible. Quiet, quiet. She’s asking a question, don’t be rude.”
“Since you’re attacking our news organisation, can you give us a question?” Acosta asked in response.
“I’m not going to give you a question. You’re fake news,” Trump replied, though he did, later, take a question from a different CNN reporter.
As president, Trump will not have the authority to kill the merger of AT&T and Time Warner himself.
There are two potential government groups that might have a say in whether the deal goes through: the FCC and the Department of Justice (DOJ).
The FCC is the bigger threat, since it has a broad mandate to kill mergers it thinks aren’t in the “public interest,” and can also put restrictions on the merger. The DOJ, on the other hand, has to actually prove the deal is anti-competitive, which is a taller order.
However, AT&T believes the merger won’t be under the jurisdiction of the Federal Communications Commission. In November, AT&T outlined the case to Wall Street at RBC’s Technology, Internet, Media and Telecommunications Conference in New York.
“The only scenario in which the FCC would have jurisdiction is if Time Warner transfers certain broadcast licenses to AT&T,” wrote RBC analyst Jonathan Atkin, who viewed the presentation by AT&T’s Chris Womack and Michael Black. And in a regulatory filing last week, Time Warner confirmed that it doesn’t need to do so.
In the filing, Time Warner said it “will not need to transfer any of its FCC licenses to AT&T in order to continue to conduct its business operations after the closing,” according to Reuters. Under the purvey of the FCC, Time Warner only has WPCH-TV, a broadcast station, and a few smaller licenses, Reuters reports.
“The company believes these licenses … can be offloaded easily,” Atkin wrote in November, after viewing the AT&T presentation.
That would leave only the DOJ, and so the fate of the deal might rest in Jeff Sessions, Trump’s nominee for attorney general, and the antitrust tone he sets if his nomination is approved.
On the campaign trail, Trump railed against the merger. “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 in a speech in October.
If the DOJ can prove that this concentration of power is anticompetitive, the merger could die on the vine.
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