AT&T And Time Warner $85 Billion Mega Deal Yet To Convince Regulators
Second largest telecommunications company AT&T plans to merge with media giant Time Warner in an $85.4 billion mega deal, which AT&T CEO Randall Stephenson claimed will bring better price options for consumers. Senators, however, expressed skepticism on the necessity for the merger.
When the deal was announced in October, Democratic and Republican lawmakers as well as consumer rights group have worried about how it would affect the Americans. Even President-elect Donald Trump, during his campaign, said that he would kill the deal as it monopolizes "power in the hands of too few."
Stephenson, however, is positive that the deal will be approved despite the president-elect's objection.
Gene Kimmelman, a former Justice Department official and president of the consumer-advocate group Public Knowledge, commented that the concentration of market power could "harm the democratic process."
He acknowledged that both companies have separately brought innovative services, but was cautious about the possible results of the combined assets.
AT&T and Time Warner were called to face the Senate subcommittee on antitrust, competition policy and consumer rights regarding the deal on Wednesday.
Sen. Richard Blumenthal, D-Conn., however, said that he has yet to be convinced about the merger as he has "very serious concerns about this transaction."
Other senators also questioned the deal with Sen. Mike Lee of Utah asking the CEOs if the merger might lead AT&T to anticompetitive favoritism. He also said that the merger could lead to price and access problems for competitors seeking Time Warner's content, such as HBO.
Sen. Charles Grassley of Iowa raised his concerns about the blockbuster deal's possible effect on the freedom of the press, as well as the merged company's ability to employ "bullying" tactics to dictate rates and terms to other networks.
Sen. Amy Klobuchar of Minnesota asked about consumer pricing, while Sen. Al Franken of Minnesota asked Stephenson whether the existing net neutrality rules would be sufficient to protect consumers.
Stephenson answered that the merger would not lead to price gouging and that innovation would flourish. He also stressed that the aim of the merger is to compete more aggressively with cable TV providers.
"Together, AT&T and Time Warner will disrupt the entrenched pay-TV models, giving customers more options, creating more competition for cable TV providers and accelerating deployment of 5G wireless broadband," Stephenson said, assuring the senators that the combined companies would push technology forward and provide more choices for customers.
This future of the deal depends on the antitrust enforcers in the Trump administration, as they will decide whether to approve or block it.