Ownership

Although there is a view that the regulatory environment for large mergers may have softened with the current government, a deal could still face considerable hurdles. The stance of the current administration on telecommunication mergers has been somewhat unpredictable. For instance, the Justice Department sued AT&T November 2017 to block its $85 billion take-over of media behemoth Time Warner. There is a possibility that the DoJ could remain averse to a deal this time around as well.

As streaming video continues to chip away at cable TV subscriber numbers, Comcast is making some of its Internet speed increases available only to customers that pay for both Internet and video service. The week of April 23, Comcast announced speed increases for customers in Houston (TX) and the Oregon/SW Washington areas.

The Justice Department made a final pitch against AT&T's $85 billion deal to acquire Time Warner, demanding in federal court that the deal be blocked or that AT&T should be permitted only to buy a portion of the media and entertainment giant. Addressing a packed courtroom that included the chief executives of both companies, Justice attorney Craig Conrath cited economic analyses, industry witnesses and AT&T's own statements to support the government's case opposing the tie-up.

The boards of Sprint and T-Mobile US struck a $26 billion merger that, if allowed by antitrust enforcers, would leave the US wireless market dominated by three national players. Under the terms of the deal, T-Mobile will exchange 9.75 Sprint shares for each T-Mobile share. T-Mobile parent Deutsche Telekom will own 42% of the combined company and Sprint parent SoftBank Group will own 27%. The remaining 31% will be held by the public. Deutsche Telekom would also control voting rights over 69% of the new company and appoint nine of its 14 directors.

[Commentary] It makes sense for Sinclair to keep things rolling at the Federal Communications Commission and close on the Tribune merger before a possible adverse court ruling on the FCC's UHF discount, which could come in August or September. I think that Sinclair now understands the urgency. The regulatory and legal picture is complicated. But under all the scenarios, its chances improve the quicker it moves with the Fox deal, the FCC process and the closing.

Even if a federal judge sides with AT&T in its fight to take over Time Warner for $85 billion, victory won’t have come cheap. AT&T spent $1.1 billion in 2017 on debt interest and fees tied to the proposed merger, plus $214 million on related integration costs. The first quarter added another $67 million of integration costs. Time Warner said it spent $279 million on merger costs in 2017 and another $146 million through March.

Twenty-two US senators wrote Federal Communications Commission Chairman Ajit Pai asking the FCC to stop making impacting the broadcast industry until it has taken a "holistic look" at the state of broadcasting and the media. They said they had noted Pai's elimination of local TV and radio ownership limits with growing concern. 

In London, Facebook’s chief technology officer, Mike Schroepfer, faced more than four hours of questions from a British parliamentary committee over the company’s data-collection techniques, oversight of app developers, fake accounts, political advertising and links to the voter-targeting firm Cambridge Analytica. If American politicians have been lampooned for being Luddites, the British Parliament’s Digital, Culture, Media and Sport Committee has built a reputation for thoroughness and detailed questioning.

House Communications Subcommittee Chairman Marsha Blackburn (R-TN) and Rep James Hines (D-CT) testified before the House Judiciary Committee about alleged online censorship of conservative speech. The hearing was on "Filtering Practices of Social Media Platforms" and stemmed in part from Facebook CEO Mark Zuckerberg's testimony before Congress recently.  The first two panelists were members of Congress, and as such only presented statements and were not questioned afterward.

Federal Communications Commission Chairman Ajit Pai wasn't predicting when the FCC's vetting of the Sinclair-Tribune deal would be complete, but suggested that the FCC had not yet had a chance to fully evaluate it. Sinclair filed its latest, and expected to be last, amendment to the deal earlier during the week of April 23.