Although it seems inevitable, the FCC is doing its best to keep AT&T and Time Warner Cable from merging. Image Source: Bidness Tech

The U.S. Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer rights will hold a hearing regarding the proposed merger of telecommunications giant AT&T and media company Time Warner, as reported earlier today by a spokesman of the Senate.

The deal is the biggest of the year, with a price tag of 85 million for the purchase of Time Warner. AT&T announced the proposition close to two weeks ago. It has raised many concerns from lawmakers and even from both current presidential candidates.

AT&T looks to change the media landscape in the United States. The company bought DirecTV in July 2015, taking ownership of one of the most prominent cable TV providers in the nation. An acquisition of Time Warner would give them control over media outlets like Warner Bros, HBO, and TBS, among others.

AT&T's purchase of Time Warner Cable will be under scrutiny in the United States: The Verge.
AT&T’s purchase of Time Warner Cable will be under scrutiny in the United States: The Verge.

The reason behind the government’s scrutiny

AT&T’s purchase proposal of Time Warner has received political attention similar to that received by Microsoft’s deal with LinkedIn or Apple’s recent legal battle concerning ebook prices. Antitrust laws are regulations that keep companies from creating market monopolies and stifling competition.

Democratic nominee Hillary Clinton stated this particular deal was suspicious to her and that she supported having regulators take a deeper look at the companies’ merger proposal. Her Republican counterpart, Donald Trump, outright claimed that he would block the deal from happening.

Like Salesforce recent complaint that Microsoft would make it harder for users to access LinkedIn’s data, AT&T could hold its competitors from accessing Time Warner’s programming, an action that ultimately hurts consumers more than companies.

Warner Bros. has yet to comment officially on the issue. Image Source: Warner Bros. Pictures
Warner Bros. has yet to comment officially on the issue. Image Source: Warner Bros. Pictures

At the same time, the fact that it already owns DirecTV could mean that the company could force them to quit broadcasting programming from market rivals. Similar questions arose when mass media company Comcast acquired the NBC television network in 2011.

Possible outcomes after the announcement of the hearing

“The wild card in all this will be the Federal Communications Commission,” said analyst Roger Entner, cited by Bloomberg.

The regulatory institution has the last word on these matters and could potentially support the end of the deal, but they have not released any official statement.

Senators Mike Lee (Republican), and Amy Klobuchar (Democrat) both agreed that the subcommittee mentioned above would “carefully review” the entire process, according to Reuters. They released a joint statement earlier today addressing the situation.

The panel has not yet determined an official date for the hearing but said that it would happen sometime in November.

Source: Reuters

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