Senate grills AT&T over Time Warner deal
US politicians raised competition concerns over AT&T's $85.4 billion bid to buy the media giant
AT&T's CEO faced a grilling from senators over competition concerns around its $85.4 billion bid to buy Time Warner Entertainment.
Randall Stephenson, chairman and CEO, appeared alongside Time Warner chief Jeff Bewkes to answer questions put forward by the Senate antitrust commission over the proposed takeover, one of the biggest in telecoms history.
The deal was announced in October but was immediately met with opposition. President-elect Donald Trump promised to block the takeover, although reports claim he has softened his stance since winning the election last month.
Senator Richard Blumenthal, a Democrat, challenged the two CEOs to address Trump’s threat to block the deal, with Bewkes and Stephenson both pledging it would not influence the coverage of news outlets such as CNN, which is owned by Time Warner.
Senator Amy Klobuchar, also a Democrat, likened the proposed takeover to a “tired movie franchise”, adding: “We can predict the ending before it begins. The promise of thriving competition collapses, replaced by dominant firms with monopoly power."
Senators expressed concerns around the merged company’s ability to use its power to dictate rates and terms to other networks, by concentrating too much power into one company.
In defending the deal, Stephenson said the acquisition could act as a challenge to cable companies, while also promoting the roll -out of faster services.
"What this merger is not about is consolidation either in media or telecom," Stephenson said.
"Our intent is to disrupt the existing pay-TV model. We want to get the most content to the most people at the lowest cost. And we want consumers to pay for their content once and then watch it anywhere at any time. Every episode, every season on whatever device they choose."
Congress will not rule on the deal, as it will be reviewed by the Justice Department and possibly the Federal Communications Commission. Trump’s election means the FCC is facing a major overhaul, but whether this will benefit AT&T’s merger plans or harm them remains to be seen.