Given the equation AT&T has with the FCC, avoiding overbearing scrutiny may result in scuttling the deal. Turns out WPCH-TV could play a key role in this proposed merger.
As per analysts, if AT&T were to divest its stake in one of Time Warner’s broadcast station, its $85.4 billion acquisition of Time Warner Inc., need not necessarily be subject to a lengthy and rigorous antitrust scrutiny. Last week, AT&T had said, its acquisition of Time Warner would be subject to approval from the U.S. Justice Department.
Both companies were pondering over which Time Warner U.S. Federal Communications Commission license(s), if any, would be transferred to AT&T as part of the deal.
Any transfer(s) would require FCC approval.
Neil Grace, FCC’s spokesman declined to comment.
In order to block the deal from going through, the Justice Department has to prove that the deal harms competition. On the other hand, the FCC has a broader leeway, it can block the deal if it were to judge that the merger would not be in the “public interest”. It can also impose additional conditions.
Several analysts have noted that since Time Warner as only one FCC-regulated broadcast station- WPCH-TV – in Atlanta, if Time Warner were to sell the license, the deal, most likely, will not attract FCC’s review.
However Rich Greenfield, an analyst at BTIG has cautioned saying, even if AT&T acquires no licenses in the deal, the FCC may still nose in and is likely to want to plat an indirect role in the merger.
Taking a positive view of things, David McAtee, AT&T’s general counsel and senior executive vice president said in a statement, history is on the company’s side.
“In the modern history of the media and the internet, the U.S. government has always approved vertical mergers like ours, because they benefit consumers, strengthen competition, and, in our case, encourage innovation and investment,” said McAtee.