This week saw United States lawmakers grill the second biggest wireless carrier in America regarding its plans to complete its acquisition of media empire Time Warner for a sum of $85 billion. Some of the questions thrown by the US Senate antitrust subcommittee revolved around how the merger would potentially impact prices for Americans or affect fair competition among online video content service providers.
AT&T has been getting increased political pressure even since it announced its intentions of purchasing Time Warner. Even the President-elect himself, Donald Trump, has stated that if given the chance, he would not let the acquisition happen. Trump’s argument is that the merger would result to too much concentration of power in the hands of too few entities. Still, in recent weeks, there has been some indication that the soon to be leader of the free world has relaxed his stand on the subject. On his transition team, he has even welcomed some advisors who are known supporters of the Time Warner deal.
Apart from being a wireless giant (second only to industry leader Verizon Wireless), AT&T also currently has 25.3 million TV customers made possible through its purchase of satellite TV provider DirecTV. If the merger deal becomes reality, AT&T would be in a really good position to not only capture a huge market share in wireless, but also in media as well.
The Senate may be asking AT&T the tough questions now, but ultimately, the last decision to approve the Time Warner acquisition actually lies with the antitrust enforcers in Trump’s upcoming administration. And AT&T is actually confident about its chances. According to Randall Stephenson, the chairman and chief executive officer of AT&T, the wireless carrier has already began the review process, and based on the facts presented for the case, he believes that the deal will be approved.
But before that, Stephenson along with Jeff Bewkes, the chief executive officer of Time Warner, had to face the music. Mike Lee, a Republican Senator from Utah and chairman of the subcommittee, asked if the tie up between the two companies might lead AT&T to favor its own programming over the competitors’. Echoing Trump, Republican Senator Charles Grassley of Iowa expressed some concerns that an AT&T-Time Warner merger would put too much power in the hands of one company, and that might impact how free the press will be.
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