AT&T and Time Warner Tell Senators They Won't Hurt Competition

  • Companies reply to January letter from 13 U.S. senators
  • Senators said combination could raise prices on consumers

AT&T Inc. and Time Warner Inc. promised lawmakers who criticized their planned merger that the combined company wouldn’t withhold programming from rivals to gain a market advantage.

“Restricting distribution of Time Warner content would not only sacrifice revenues, but also damage Time Warner’s reputation and relationships in the entertainment industry,” the companies told the lawmakers, according to a summary released by AT&T and Time Warner.

The companies were responding to a Jan. 25 letter from 12 Democratic senators and Bernie Sanders, an independent senator, who said the $85.4 billion merger could raise prices, reduce access to independent programming and harm small businesses and content producers. The combined company has “both the incentive and ability to use its platform to harm competitors,” the lawmakers said. Signers included Senator Al Franken of Minnesota and Senator Ed Markey of Massachusetts.

Markey and Franken said the response left them wanting more scrutiny for the deal.

“Nothing in their letter eases my very serious concerns that this deal will lead to higher prices, fewer choices, and even worse service,” Franken said in a Facebook post.

Review Process

The Justice Department is reviewing the deal. But AT&T has said it will structure the transaction to avoid a parallel review by the Federal Communications Commission. It told the senators that Time Warner won’t need to transfer any of its FCC licenses to AT&T.

“Almost all of Time Warner’s existing licenses are used only for internal communications anyway; they do not provide FCC-regulated services to the public,” according to the summary provided by the companies. The letter to the senators was signed by AT&T Executive Vice President-Federal Relations Tim McKone and Time Warner Senior Vice President, Global Public Policy Steve Vest, the companies said.

The senators said structuring the deal to avoid FCC scrutiny “will circumvent” a public review by the agency. Lawmakers don’t directly vet deals, but they do have influence over agencies, for instance by controlling budgets.

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