Why the AT&T and Time Warner merger appeal matters — and why it’s a long shot

The Department of Justice (DOJ) appeal of the AT&T-Time Warner decision doesn’t have any immediate effects on the company's plans since the DOJ didn’t ask for a legal stay while it filed its appeal. But it signals the department’s plans to keep fighting consolidation, which could help shape the landscape for future mergers. If the Department of Justice successfully appeals the decision, it could make many other deals less likely to succeed, setting a precedent for considering vertical mergers potentially as monopolistic as horizontal ones. And just filing the appeal could have a chilling effect on merger bids in the short term. Comcast, for example, is planning to undercut Disney and make a counteroffer to buy 21st Century Fox. But this appeal could make it think twice.

Also, Iif the DOJ is successful, AT&T could be forced to split off the renamed Warner Media, which is still being operated as a separate group. But that’s probably not going to happen. Public Knowledge president Gene Kimmelman said that the appeal “signals to the market the government isn’t throwing in the towel, but I think it’s a long shot.” The court could fast-track the case and hear it in a matter of months — because the longer the process takes, the more integrated the companies become. After the DC court decision, either AT&T or the Justice Department could appeal to take the case to the Supreme Court, which would stretch the timeline significantly longer. AT&T is sticking to its original plans while the appeal proceeds, and since the merger closed in June, there aren’t any practical barriers to doing so.