Senator Al Franken, along with 12 other senators—including Bernie Sanders, Elizabeth Warren, Ron Wyden, and Richard Blumenthal—have sent a letter to AT&T asking them to explain how their reported $85.4 billion Time Warner purchase will benefit customers.
US Senate Democrats led by Al Franken (D-Minn.) yesterday challenged AT&T to prove that its proposed purchase of Time Warner will benefit the public interest. Franken's letter comes as AT&T attempts to avoid a Federal Communications Commission review of its $85.4 billion Time Warner purchase. In an FCC review, the company would have to file what's known as a "public interest statement." This detailed document—the one AT&T filed for its DirecTV purchase was 349 pages long—is meant to prove that a merger is good for the public instead of merely being good for the merging companies.
But AT&T and Time Warner only have to seek an FCC review if Time Warner transfers FCC licenses to AT&T, and the companies have been working up a plan in which Time Warner would transfer or sell those licenses to someone else.
The letter can be seen here. It is addressed to both Time Warner and AT&T’s CEOS, Jeffrey Bewkes and Randall Stephenson.
Dear Mr. Stephenson and Mr. Bewkes:
We are writing regarding AT&T'S recent filing with the Securities and Exchange Commission, which signaled that you are structuring AT&T'S proposed acquisition of Time Wamer in a way that avoids scrutiny by the Federal Communications Commission (FCC). In doing so, AT&T and Time Warner will circumvent the FCC s merger and acquisition review standard, which requires that the parties demonstrate - on the public record - that the proposed deal would serve the public interest by, among other things, improving access and affordability of telecommunications services, promoting the diversity of ideas, and ensuring the free exchange of information. To achieve greater transparency for regulators, lawmakers, and American consumers, we ask that you provide us with a public interest statement detailing how you plan to ensure that the transaction benefits consumers, promotes competition, remedies all potential harms, and further serves the public interest through the broader policy goals of the Communications Act.
Before a company can complete a merger or acquisition involving telecommunications licenses that the FCC has previously granted, it must submit an application seeking the FCC's approval. The Commission will approve such an application only if it determines that the parties seeking approval have demonstrated that the deal would affirmatively benefit consumers and competition and more broadly serve the public interest. Importantly, the parties' application is made available to the public, and consumers, advocacy organizations, and the business community are given a meaningful opportunity to respond with their perspective on how the transaction would impact their individual interests. But by divesting the relevant licenses, AT&T and Time Wamer will no longer have the legal burden of proving that the proposal would serve the public interest, and the public is left largely in the dark about how the deal would impact the affordability and quality of their phone, internet, and video services.
While we appreciate your testifying before the Senate Judiciary Committee in December of last year, we remain concerned about how a deal of this size could affect consumers and competition. AT&T is already the world's largest pay TV provider and the largest telecommunications company. Combining it with one of the world's largest producers of content gives AT&T-Time Wamer both the incentive and ability to use its platform to harm competitors, and as a result, consumers. The combined company could promote its own programming above that of other content companies' or restrict other distributors' ability to offer its highly-desired content. As a result, the merger could raise prices on consumers, reduce access to independent
As if on cue, The Wall Street Journal is reporting that Verizon is “exploring combination with cable firm Charter Communications.” In WSJ speak “combining” means “monopolizing with,” but they must not have been able to fit that many characters into the headline.