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Dec. 6 — Sen. Al Franken (D-Minn.) is poised to take on AT&T Inc.’s planned acquisition of Time Warner Inc. in his latest battle against consolidation in the communications sector.
Franken, a tough critic of the proposed $85.4 billion merger, will have an opportunity to grill company executives at a Dec. 7 Senate committee hearing on the competitive impact of the deal.
“The hearing sort of sets the tone for the year-long review of the merger,” Mark Cooper, research director for the Consumer Federation of America (CFA), told Bloomberg BNA. Franken “will most certainly” be a voice for consumers throughout the process, Cooper said.
A Franken spokesman said the senator plans to ask “pointed” questions at the hearing, but didn’t provide details. Franken has said that he’s skeptical of huge media mergers because they can lead to higher costs, fewer choices and worse service for consumers.
Industry analysts said the hearing by the Senate Judiciary Antitrust Subcommittee could offer a preview of the kind of arguments that regulators will look at in their review of the merger, but will probably have very little impact on the final outcome.
“The agencies have tests and standards” for reviewing mergers, Hal Singer, a principal at Economists Incorporated, a Washington-based consulting firm, told Bloomberg BNA. “This isn’t going to be a popularity contest.”
Franken has said the AT&T-Time Warner deal deserves the “highest level of scrutiny” from the Department of Justice and Federal Communications Commission. The senator was also a leading opponent of an unsuccessful merger deal between Comcast Corp. and Time Warner Cable Inc.
“It’s no secret that Sen. Franken has been an outspoken critic of mergers and acquisitions run amuck, especially in the communications space,” Matt Wood, policy director at Free Press, a public interest group, told Bloomberg BNA.
Both AT&T CEO Randall Stephenson and Time Warner CEO Jeffrey Bewkes are set to testify at the upcoming hearing, which was called by the chairman and ranking member of the Senate Judiciary Antitrust Subcommittee. The witness list also includes billionaire and entrepreneur Mark Cuban as well as Gene Kimmelman, president of Public Knowledge, a consumer advocacy group that has objected to the merger.
Sen. Amy Klobuchar (D-Minn.), ranking member of the subcommittee, said she’s concerned the tie-up might undermine competition and drive up prices for consumers.
“Game of Thrones on HBO, the Queen on Netflix, Mozart in the Jungle on Amazon--we want more content like this, and that’s why it’s critical to maintain competition that drives innovation and benefits consumers,” she said in an e-mailed statement.
Sen. Richard Blumenthal (D-Conn.), a member of the panel, told Bloomberg BNA he has “very strong qualms” about the merger.
CFA plans to unveil a report on the day of the hearing that will highlight the risks of industry consolidation that has been taking place, Cooper said. The group is working closely with Public Knowledge on the effort, he said.
AT&T and Time-Warner announced their deal in late October. The transaction would combine Time Warner’s vast library of entertainment programming with AT&T’s pay-TV, mobile phone and home internet services.
President-elect Donald Trump quickly slammed the deal after it was proposed, saying it would be rejected under his administration. But he hasn’t commented since the election on whether he intends to follow through on his campaign rhetoric.
“This will be a big test for Trump,” Cooper said, adding that any flip-flopping by the incoming president will likely face push back.
Franken warned in an Oct. 24 letter to DOJ and the FCC that combining AT&T and Time Warner would create a “mega media conglomerate with both the incentive and ability to use its platform to harm consumers and competitors alike.” The alum of NBC’s Saturday Night Live program said he had “serious doubts” about whether behavioral conditions can effectively address these concerns.
He was similarly skeptical about such conditions when Comcast acquired NBC Universal.
“I have had this history where I have seen NBC and I have seen other networks promise something and then do the 180-degree turn on it,” Franken said at a Senate Judiciary Committee hearing in 2011. “There is no question about that. People in my industry—or my former industry—they know that.”
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