AT&T and Time Warner have a plan to dodge merger review

Time Warner might sell its FCC licenses to another broadcaster ahead of the acquisition.

Sponsored Links

AT&T has indicated how it may avoid FCC scrutiny over its proposed $85.4 billion Time Warner merger. At issue are Time Warner's FCC broadcast licenses -- if were to transfer them to AT&T, that would require FCC approval. However, in a filing with the Securities and Exchange Commission (SEC), AT&T said "it is currently anticipated that Time Warner will not need to transfer any of its FCC licenses ... after the closing of the transaction."

The merger is strongly opposed by consumer groups since it would give AT&T control over Time Warner properties like CNN, HBO and the Harry Potter franchise. It could then favor that content on its DirecTV cable and internet platforms by offering them at lower rates.

Time Warner needs FCC licenses so that HBO and other stations can transmit programs to satellites and back down to pay-TV distributors. However, according to Bloomberg, it has been trying to sell them to another broadcaster, after which it could simply contract with a third party for satellite uplinks and other chores. AT&T could also just drop the licenses and transmit data by land.

That would leave Time Warner with no licenses to transfer to AT&T, and therefore no need for FCC approval. In that case "it would be very hard" for the commission to gain jurisdiction, analyst Craig Moffett told Bloomberg, leaving the decision to the Department of Justice, which is about to fall into Republican hands.

That said, President-elect Donald Trump opposed the merger during the Presidential campaign, saying it "concentrates too much power in the hands of the too and powerful few." Some pundits think he has changed his mind, given his recent appointments, but Bloomberg reported that he's still against it. Anyway, it's not clear if he'd be able to affect the deal one way or the other anyway, since both Republican and Democrat senators are opposed to it.

Popular on Engadget