Hillary Clinton is taking a more cautious approach to the proposed $85 billion merger.
Time Warner Center, New York City. Photo © Brian Lauer/Flickr
Leading US politicians from both parties suggested on Sunday that AT&T's blockbuster $85 billion plan to buy Time Warner could face a daunting road toward regulatory approval, as public interest advocates ramped up warnings of higher pay-TV prices for consumers if the merger goes through.
The proposed deal, which would combine AT&T's vast wireless and pay-TV network with Time Warner's rich content portfolio has prompted bipartisan skepticism, indicating that the merger could face significant political headwinds in the months ahead—not to mention fierce resistance from public interest advocates concerned about higher consumer prices.
"Much of the American media system is already plagued by prohibitive costs and poor services, and this merger would not make things better," said Victor Pickard, associate professor at the Annenberg School for Communication at the University of Pennsylvania. "Indeed, it could make things considerably worse."
Hillary Clinton, who holds a strong lead in national polls with two weeks to go before the election, has thus far taken a cautious approach to the proposed merger, but nevertheless made clear through a spokesperson that the deal should be closely examined by federal regulators.
"We think that marketplace competition is a good and healthy thing for consumers," Clinton spokesperson Brian Fallon said in comments cited by CNNMoney. "And so there are a number of questions and concerns that rise in that vein about this announced deal but there is still a lot of information that needs to come out before any conclusion should be reached. Certainly she thinks that regulators should scrutinize it closely."
Meanwhile, in an unlikely pairing of political bedfellows, both Donald Trump, the Republican presidential nominee, and Sen. Bernie Sanders, the Vermont Democrat and former presidential candidate who is now supporting Clinton, flatly denounced the proposed merger over the weekend.
"The administration should kill the Time Warner-AT&T merger," Sanders tweeted. "This deal would mean higher prices and fewer choices for the American people." Trump, meanwhile, warned that the proposed merger would result in "too much concentration of power in the hands of too few."
Those comments echo concerns that have been raised by public interest groups, who are warning that the deal could tempt AT&T to prioritize Time Warner content over rival programming for the telecom titan's subscribers, or extract higher prices for HBO, CNN, or Warner Bros. content from the company's pay-TV competitors. That could lead to higher prices for consumers.
The surprisingly vocal expressions of doubt about the proposed merger underscore growing concern among policy experts from across the political spectrum about corporate consolidation throughout the economy at a time when economic inequality has become a major issue in the presidential election. (Time Warner is not to be confused with Time Warner Cable, the pay-TV company that was purchased by cable giant Charter earlier this year.)
Sanders' opposition to the AT&T-Time Warner deal is not surprising. The Vermont senator has long opposed the decades-long trend of corporate consolidation across US industries, from media to telecom to Wall Street. Trump's opposition appears to be more self-serving, and dovetails with the reality TV star's increasingly vocal complaints about a media conspiracy to "rig" the presidential election against him.
Sen. Tim Kaine, the Virginia Democrat who is Clinton's vice-presidential running mate also weighed in over the weekend. "I'm pro-competition," Kaine told NBC's Meet the Press on Sunday. "Less concentration, I think, is generally helpful especially in the media."
In Congress, two influential lawmakers on the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights said that the proposed deal would face tough scrutiny to ensure that the merger does not increase prices or otherwise harm consumers.
"An acquisition of Time Warner by AT&T would potentially raise significant antitrust issues, which the subcommittee would carefully examine," Sen. Mike Lee, the Utah Republican, and Sen. Amy Klobuchar, the Minnesota Democrat, said in a joint statement. A spokesperson for the subcommittee told Reuters that an initial hearing on the deal will be held later this year.
The merger would combine Time Warner's lucrative entertainment properties, including HBO, CNN, and Hollywood studio Warner Bros, with AT&T's vast distribution network that reaches more than 100 million consumers across the telecom giant's TV, mobile, and broadband businesses.
As the two giant companies begin what will be a months-long campaign to gain government approval for the deal, AT&T CEO Randall Stephenson sought to assure regulators that the combined company would take a hands-off approach to CNN, which is one of the most visible and important news-gathering operations in the country.
"Our intent is to operate Time Warner as it operates today, with autonomy in its divisions, including the world-class creative talent and journalists that make Time Warner a leader in entertainment and news," Stephenson said in a statement. "CNN is an American symbol of independent journalism and First Amendment free speech. My board and I are clear—CNN will remain completely independent from an editorial perspective."
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