AT&T deal may avoid regulator oversight

Telecom giant braces for tough antitrust review of $85.4b deal to buy Time Warner Inc

AT&T Inc may bypass a powerful telecommunications regulator by offloading a Time Warner broadcast station, analysts say, as the telecommunications giant braces for what is expected to be a lengthy and tough antitrust review of its proposed $85.4 billion (Dh313.67 billion) deal to buy Time Warner Inc.

Dallas-based AT&T said late Saturday the deal would need approval of the US Justice Department and the companies were determining which Time Warner US Federal Communications Commission licences, if any, would transfer to AT&T as part of the deal. Any such transfers would require FCC approval.

AT&T clash with FCC

AT&T has clashed with the FCC in recent years on a number of fronts. An AT&T spokesman declined on Sunday to elaborate on whether the FCC would need to formally approve the transaction.

Comcast’s 2011 takeover of NBCUniversal — the last marriage of a distribution powerhouse with a major media and content provider, such as AT&T and Time Warner — was reviewed by both the Justice Department and the FCC.

The FCC played a key role in that review and, by a 4-1 vote, approved the deal with significant conditions, some of which last until 2018.

The Justice Department has to prove a proposed deal harms competition in order to block it. But the FCC has broad leeway to block a merger it deems not to be the “public interest” and can impose additional conditions.

Despite its big media footprint, Time Warner has only one FCC-regulated broadcast station, WPCH-TV in Atlanta. Time Warner could sell the licence to try to avoid a formal FCC review, analysts said.

But, even if AT&T acquires no licences in the deal, BTIG analyst Rich Greenfield said the FCC still may play an indirect role in the merger review.