The $85 Billion Question: Will the FCC Review the AT&T-Time Warner Deal?

It’s the $85 billion question. Will the Federal Communications Commission have jurisdiction over AT&T’s blockbuster $85 billion buyout of entertainment giant Time Warner? The reason why this is important is that the FCC is likely to take a more skeptical view of the deal than the Justice Dept. In mergers like these, the Justice Dept.’s job is to ensure that the deal doesn’t run afoul of antitrust laws. The FCC, by contrast, has a more rigorous responsibility: To ensure that the deal serves the public interest. That’s why AT&T wants to avoid FCC scrutiny in this case.

As a technical matter, it would be very difficult for AT&T to absorb CNN and HBO without the broadcast functionality that these licenses provide, according to John Gasparini, policy fellow at DC-based consumer advocacy group Public Knowledge. “It appears that AT&T and DirecTV do not currently have sufficient satellite licenses to forgo acquiring the Time Warner licenses without impacting the operations of big-name properties like CNN and HBO,” Gasparini said. “As a result, it’s more than likely that AT&T and Time Warner will need to secure FCC approval before the deal goes through.” “The only way AT&T could avoid FCC scrutiny is if they deliberately structure this deal in a convoluted way to avoid a transfer of these licenses and thus FCC review,” Gasparini added.