AT&T, Time Warner to push merger before Senate

Senators questioned the heads of AT&T and Time Warner on a range of topics related to their proposed merger Wednesday.

AT&T CEO Randall Stephenson, Time Warner CEO Jeffrey Bewkes along with Dallas Mavericks owner and billionaire Mark Cuban defended the merger on Capitol Hill, arguing the merger allows AT&T to compete with tech behemoths such as Google, Apple, Facebook and Amazon.

Bewkes said the intent of the merger is not just to disrupt the “entrenched pay-TV model”, but to deploy advanced technology like 5G wireless, sooner and faster.

The Senate Judiciary subcommittee on antitrust doesn’t have authority to rule on the merger, but members are likely to use their platform to ask questions such as whether the companies would not share Time Warner content with other cable companies or online video providers.

“The new antimerger fervor is based upon the presumption that they are never a good deal for consumers because more consolidation always leads to higher prices, and never leads to cost savings or product improvements that benefit consumers”, he wrote. Critics including the FCC and pro-net neutrality groups say that will incentivize users to favor AT&T-owned content. Republican Sen. Charles Grassley of Iowa, cited concerns that a merger of this size would concentrate too much power in the hands of one company and he anxious that it might affect freedom of the press. AT&T Inc announced Aug 27, 2014 that it would be merging its wireless and business divisions into a single unit.

“Let’s see what happens on January 21st and then we’ll go from there”, Cuban said.

Gene Kimmelman of consumer advocacy group Public Knowledge that his group estimated that cable consumers were being overcharged by “at least $45 a month” already “because there are too few players”.

Daphna Ziman, the president of the TV network Cinémoi and another opponent of the deal, is slated to testify as well. At the same time, we should carefully evaluate the parties’ claims that the merger will benefit subscribers by, for example, expanding the amount of available content that doesn’t count against monthly data caps. Blumenthal said. AT&T Chairman and CEO Randall Stephenson has not met with Trump’s transition team, but he said he is confident that regulators will approve the deal, “once everyone hears the facts and has the appropriate competitive analysis”. “You’d have every reason to do this if you could”, Franken told Bewkes.

“I can and intend to represent to you”, Stephenson told Sen.

The merger’s potential impact could include price and access problems for competitors seeking Time Warner’s prized content, such as HBO, said Mr. “Our ambition is that the customer pays for their content only one time”.

But Subcommittee Chairman Mike Lee (R-Utah) warned that “although vertical deals typically raise fewer concerns than do their horizontal counterparts, such deals nevertheless may still tend to substantially lessen competition”.

Paul Gallant, analyst at Cowen & Co., says the hearing could set a tone for the Department of Justice. AT&T can already harm its video distribution competitors by making it more hard to reach customers on its networks; acquiring Time Warner programming would increase AT&T’s incentive to harm rivals in this way.

The fate of the merger appeared uncertain last month after Donald Trump pulled off a stunning upset over Hillary Clinton in the presidential election. But they avoided criticizing the incoming administration.

Stephenson, meanwhile, boasted that it made sense to buy rather than license TV content in part because Time Warner is “the peach of them all” with its properties like HBO and CNN.

Bewkes and Stephenson have also expressed optimism about the merger’s prospects for approval.

Stephenson said at a NY conference on Tuesday that the Justice Department had begun reviewing the deal, which was announced in October.

“This is a vertical merger”, he said. I hope he’s a superstar and I hope everything turns out the way we all hope it will.