FCC chairman Ajit Pai said today that he doesn’t expect the commission to review AT&T’s purchase of Time Warner, clearing the way for the Justice Department to very likely approve the deal.
Pai has long been critical of the FCC putting conditions on mergers and even signaled in the past that he’d be okay with a mega-merger like the one proposed between Comcast and Time Warner Cable (which is a different company than Time Warner) in 2014, so today’s announcement isn’t altogether surprising.
AT&T said from the start of this proceeding that it didn’t expect the FCC to review the transaction, because there would be no transfer of wireless licenses (or Time Warner could sell off the few it currently has). On stage at Mobile World Congress today, Pai essentially said that argument is good enough for him.
“That is the regulatory hook for FCC review,” Pai said, according to The Wall Street Journal. “My understanding is that the deal won’t be presented to the commission.”
The FCC’s lone Democratic commissioner, Mignon Clyburn, said last week that she believed the commission can and should review the merger. But Pai has more-or-less said that he isn’t planning to go out of his way to review a merger unless it’s plopped on his desk, and AT&T sure doesn’t plan to put it there.
Had Pai chosen to review the merger, it would have faced much tougher scrutiny than it will at the Justice Department. The FCC has to determine that a merger is truly in the public interest for it to go through — and there’s a lot of good reason to think combining a major internet and cable provider and a major TV and movie producer is a recipe for anticompetitive behavior.
While President Trump said on the campaign trail that his administration “will not approve” the AT&T–Time Warner merger, he hasn’t touched on the issue in the months since the election and even had what appeared to be a cheery meeting with AT&T CEO Randall Stephenson in mid-January. There’s no indication so far that his Justice Department will move to block the merger; and with the FCC declining review, the toughest regulator of the deal is now out of the picture.
The FCC’s decision sets the stage for any number of other coming mergers, which are likely to receive a friendly response even if they do come under commission review. Verizon is currently rumored to be looking at an acquisition of Charter (which now owns Time Warner Cable), and talks of a possible Sprint and T-Mobile merger are starting up again, too. At this point, it’s only a matter of time until we hear of more.