Time Warner Inc. looks to be officially clear of an FCC review of its pending deal with AT&T as the agency has OK’d the sale of Time Warner’s Atlanta TV station.
In a public notice, the FCC granted the transfer of WPCH-TV’s license. In February, Meredith, which had already been operating the station since 2011, reportedly bid $70 million to buy the station off of Time Warner.
Although AT&T, Time Warner and FCC Chairman Ajit Pai had all signaled that the FCC likely had no role in vetting the potential $85 billion deal, the approved sale of Time Warner’s one remaining broadcast license essentially confirmed no FCC involvement. When the merger was announced in October last year, many speculated that the deal could avoid an FCC review as long as Time Warner divested its FCC broadcast license held by Turner in Atlanta.
In February, Pai told the Wall Street Journal that, since the companies put together the deal so that no FCC licenses need to be transferred, the FCC won’t be involved.
In an SEC filing from January, AT&T said that Time Warner won’t have to transfer any of its FCC licenses following the completion of the acquisition. Licenses covering Time Warner businesses including HBO and CNN cannot be transferred to AT&T without the FCC’s consent. By AT&T signaling that no license transfer will have to take place, it indicated that the companies can bypass the FCC’s public-interest review altogether. That would mean the companies need only the Justice Department’s nod of approval to clear regulatory reviews.
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Not facing the FCC’s public interest scrutiny likely comes as a relief to AT&T and Time Warner. AT&T CEO Randall Stephenson last year told The Wall Street Journal that the chances of getting around the FCC were slim.
“Avoiding any kind of regulatory review is always a benefit,” Stephenson told the Journal. “But we aren’t naive. We aren’t thinking that that won’t happen.”
While the FCC may be off AT&T and Time Warner’s backs, some legislators are still questioning the merits of the deal. In a letter Stephenson and Time Warner CEO Jeff Bewkes sent in February (PDF) to a group of Democratic senators, the merger was described as a positive step in positioning AT&T to better compete with cable operators.
“This is a classic ‘vertical’ merger between two companies with complementary production and distribution assets. This merger thus presents none of the standard concerns raised by merger between competitors. Such ‘horizontal’ mergers trigger scrutiny in concentrated markets because, under certain conditions, the elimination of a competitor can lead to higher prices,” the companies wrote.