The chieftains of AT&T and Time Warner will pitch the benefits of their merger to a Senate antitrust subcommittee on Wednesday, as they face a new regulatory environment of the incoming administration of Donald Trump.
The big question is, what will that be?
During the campaign, Trump said that he would block the merger of the two corporate giants, saying that it was “too much concentration of power in the hands of too few.” But there has been speculation that since he won the presidency, his choices for antitrust enforcement at the Department of Justice will take a much more favorable view of the transaction.
At a Business Insider conference on Tuesday, AT&T CEO Randall Stephenson said that “anytime the president-elect of the United States comes out and says they are not in favor of something you are trying to do you have to pay attention. That is a serious issue. I really don’t know what part of it he was referring to. I hear rumors he is not happy with CNN, that is part of the deal that we are buying. And I don’t know how much of that came into play with it.”
But he said that a big factor in why it should be approved is that it is a vertical merger in which neither company competes against the other.
“I don’t think you can find an example, either in the media and entertainment and the telecom business, where such a merger has been denied,” he said.
In fact, Stephenson said that the incoming administration would be a “positive development” that would cut back on unnecessary regulation.
Stephenson donated primarily to Republicans in the most recent cycle, including to Sen. Ted Cruz (R-Texas), House Speaker Paul Ryan, and committees to election Senate and House GOP members. He gave $50,000 in September to the Senate Leadership Fund, with a goal of expanding the Republicans’ Senate majority.
On Wednesday, he will be joined on Capitol Hill by Time Warner CEO Jeff Bewkes, who gave only to Time Warner and cable industry political action committees during the recent campaign.
At the Business Insider conference, he dismissed fears that a Trump administration will pose a threat to First Amendment issues. Instead, he said that it was Democrats who posed a threat to the First Amendment because of the party platform that called for a constitutional amendment to overturn the Supreme Court’s 2010 Citizens United ruling. That relaxed rules that prevented corporate- and union- funded outside groups from spending money on their own media advertising to support or oppose a candidate in the weeks before an election. During the campaign, Bernie Sanders and Hillary Clinton railed against Citizens United for unleashing a cascade of money into politics, while its defenders have treated it as a freedom of speech issue.
Sen. Mike Lee (R-Utah), who chairs the antitrust subcommittee, and Sen. Amy Klobuchar (D-Minn.), its ranking member, announced the hearing shortly after AT&T and Time Warner unveiled the merger in October. Another member of the committee, Sen. Al Franken (D-Minn.), has said that he has “serious reservations” about the transaction. He has grilled representatives from other media companies as they have come before the committee for other mergers, including Comcast and NBCUniversal and later Comcast and Time Warner Cable.
Stephenson and Bewkes will be joined by a panel that includes Mark Cuban, who supports the deal, and Daphna Ziman, the president of Cinemoi, who has recently spoken out against the transaction. Also scheduled is Gene Kimmelman, the president and CEO of Public Knowledge, which also has been critical of the transaction.