Democrats to examine why Trump wanted to block AT&T-Time Warner merger: Report

According to Axios, the Democrats will investigate whether Trump's attempts to block the AT&T-Time Warner merger was merely to 'punish' to CNN.
Written by Corinne Reichert, Contributor

Once the Democrats take control of the United States House of Representatives, they are planning to look into President Donald Trump's attempts to block the merger between AT&T and Time Warner, according to a report.

"We don't know, for example, whether the effort to hold up the merger of the parent of CNN was a concern over antitrust or whether this was an effort merely to punish CNN," incoming House intelligence committee chairman Adam Schiff reportedly said in an interview with Axios on HBO.

"Schiff said Congress also needs to examine whether Trump attempted to block AT&T's merger with Time Warner as payback to CNN," Axios wrote.

US District Court Judge Richard Leon had ruled in June that AT&T could proceed with its $85 billion Time Warner purchase to create a telecommunications-media giant, despite the Trump administration opposing the deal and the Department of Justice (DoJ) suing to block it.

AT&T then closed the deal in mid-June, completing the takeover to give customers a "differentiated, high-quality, mobile-first entertainment experience".

The DoJ filed its appeal against the ruling in August, citing a "clearly erroneous" decision by a judge who made "fundamental errors of economic logic and reasoning", the government appeal argued.

CNET: AT&T's Time Warner takeover knocks over media and tech dominoes

According to the government, the ruling relied on "two fundamental analytical errors: It discarded the economics of bargaining, and it failed to apply the foundational principle of corporate-wide profit maximization".

A merger between AT&T and Time Warner would increase media prices for consumers, according to the government.

The deal was financed via AT&T issuing 1.185 million shares of common stock as well as $42 billion in cash.

AT&T followed it up by acquiring ad-tech company AppNexus in order to build a digital advertising arm to complement the Time Warner media offerings.

The carrier said it would integrate AppNexus' product managers and software engineers and use the company's tools to create digital TV advertising products.

AT&T last month revealed in a filing to the United States Securities and Exchange Commission that it is looking to launch a streaming service in the fourth quarter of 2019, with the SEC filing calling the plans for a direct-to-consumer streaming service "another benefit" of the merger.

"We are committed to launching a compelling and competitive product that will serve as a complement to our existing businesses and help us to expand our reach by offering a new choice for entertainment with the WarnerMedia collection of films, television series, libraries, documentaries, and animation," AT&T said in the filing.

"We expect financial support to launch this product to come from a combination of incremental efficiencies within the WarnerMedia operations, consolidating resources from sub-scale D2C efforts, fallow library content, and technology reuse.

"We expect to defer some licensing revenues to later periods in the form of increased customer subscription revenues."

The Democrats also want to look into whether Trump attempted to "punish" The Washington Post by trying to get the postmaster general to raise Amazon postal rates, according to Axios.


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