Time Warner-AT&T deal needs closer scrutiny, GOP senator says

Sen. Susan Collins
Sen. Susan Collins (R-Maine) has asked the Dept. of Justice to tighten its scrutiny of the proposed AT&T-Time Warner deal.

Sen. Susan Collins, R-Maine, has asked the Department of Justice to increase its scrutiny of AT&T’s pending $85 billion merger with Time Warner.

She wrote a letter to acting Assistant Attorney General Andrew Finch expressing concern that the consolidation could lead to “reduced programming choices and higher prices for consumers.”

The letter noted that, for example, HBO will be positioned differently than its premium network rivals, Showtime and Starz. “The risk is real that the acquisition of such a prominent content producer by a distributor of AT&T’s size could allow it to dramatically reduce consumer choice in favor of its new in-house brand,” Collins wrote. “I’m also concerned that this merger could encourage and enable AT&T and DirecTV to raise content costs to harm pay-TV competitors.”

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Collins has company in Congress in raising concerns about the megadeal and asking regulators to take a very close look at its every implication. Sen. Al Franken (D-Minn.) has questioned AT&T’s argument that the deal will reduce costs for consumers and bring them expanded benefits via economies of scale.

Despite the prominent voices expressing skepticism, the prevailing view is that the merger will be approved in 2018. Unlike “horizontal” combinations like AT&T’s bid for T-Mobile or Comcast’s for Time Warner Cable, which were blocked by the government, AT&T-Time Warner is a vertical merger that has minimal overlap between the companies’ existing operations.

In a pointed series of exchanges last December in a Senate hearing, AT&T chief Randall Stephenson argued: “We have little value if we start limiting access to content.” But Franken insisted, “It’s the opposite. You had to pay to get The Sopranos [TV show on Time Warner’s HBO]. And everybody wanted to get The Sopranos. So this idea, which is this basic premise, that everybody went to HBO, because we guaranteed everybody would see you, ain’t true. So I just don’t get that.”

Since the deal was first proposed, the anti-regulatory approach of the Trump Administration has only become more clear, with a Republican-majority FCC loosening many Obama-era controls. President Trump’s nomination to head the Justice Department, Makan Delrahim, hasn’t hinted at his thoughts on AT&T-Time Warner, but nothing in his conservative history suggests any instinct to hinder the deal.