AT&T tells FCC: 'if you won’t play nice, you’re not invited'

AT&T and Time Warner have filed a new document with the Securities and Exchange Commission which may allow the pair to navigate the merger around the potentially problematic FCC.

Since the announcement of the $85 billion merger, there have been a number of vocal opponents to the deal, including President-elect Donald Trump. Disapproval from the country’s new President could be disastrous, especially considering the hard Trump-line Commissioners in the FCC are likely to take in the coming months, though this new moves could see approval for the deal given without the FCC getting involved at all.

In the US, any merger of this nature usually has to receive regulatory approval from both the US Department of Justice and the FCC. However, the FCC only gets involved when communications licences are transferred between two organizations, though this new document states the licences would still remain in the Time Warner business, as part of the wider AT&T group. Regulatory approval would still have to be sought from the US Department of Justice though, in theory, the deal can go ahead without the FCC getting involved.

While there is still likely to be a substantial amount of political pressure surrounding the deal, it is certainly a safer route for the AT&T/Time Warner team. The process at US Department of Justice is purely legal; the team investigate any anti-trust concerns around the agreement and access any points against legal precedent. It’s difficult to politically influence the outcome assuming the AT&T/Time Warner lawyers do their jobs properly.

The FCC is a different matter however. Commissioners here are held accountable to decide whether such deals are in the public interest. It’s a vague area with lots of wiggle room. What is in the public interest depends on who you talk to, and the process is open to a substantial amount of interpretation. Grey areas lead to opinions not precedent, which lends itself to influence. This uncertainty is what the AT&T/Time Warner lawyers will want to avoid considering the next President has publically opposed the merger.

While the Trump-rollercoaster to date has shown nothing is guaranteed, Bloomberg has recently reinforced his anti-merger position. Trump opposed the deal on the campaign trail, and apparently told a confident recently his position remains the same as it would create a media company with too much control and influence in the US. The US Department of Justice will decide whether Trump’s opinion is correct or if it is a statement from a man who has fallen out with the media industry on numerous occasions.

The deal is still far from guaranteed, but avoiding the FCC will remove a proportion of the political influence which can be placed on the proceedings.