Pai Promises Look at FCC Role in AT&T-Time Warner Merger

Keep up with the latest developments and legal issues in the telecommunications and emerging technology sectors, with exclusive access to a comprehensive collection of telecommunications law news,...

By Kyle Daly

Federal Communications Commission Chairman Ajit Pai is willing to authorize an independent legal analysis of whether the agency will have to review the proposed merger of AT&T Inc. and Time Warner Inc., he said during a Senate hearing March 8.

Regardless of any commission role in the mega-deal, other mergers will likely come up for agency review under Pai’s leadership, as the media and communications industries eye fresh opportunities for consolidation.

The FCC is expected to take a more permissive view of mergers under Pai than under his Democratic predecessors. That may include relaxing ownership limits for broadcast stations, which are hoping then to be able to kick off a round of mergers and consolidation.

Pai told Sen. Brian Schatz (D-Hawaii) he “would be happy” to launch an independent legal analysis to formally determine if the FCC should play a part in reviewing the AT&T-Time Warner merger, after confirming that he hasn’t yet done so. Schatz asked Pai about his views on the merger during a Senate Commerce, Science and Transportation Committee oversight hearing.

Pai reiterated his view that the FCC won’t end up reviewing the merger, because the companies are expected to structure it to avoid an airwaves license transfer that would require commission review. Time Warner has sold off its sole broadcast TV station and associated licenses but still holds a number of satellite licenses.

Committee chairman John Thune (R-S.D.) told reporters after the hearing he anticipates the FCC will play at least an informal advisory role as the Department of Justice conducts an antitrust review of the proposed tie-up.

“I suspect they’ll be heard from,” Thune said. “Normally, the FCC on a lot of these issues isn’t shy about voicing their views.”

Sen. Tom Udall (D-N.M.) noted in the hearing that Trump and White House officials have been highly critical of Trump coverage from Time Warner’s CNN. Pai told the panel he hasn’t discussed CNN or any other press outlet with the White House, including during a March 6 meeting with Trump.

Pai said intends to oversee an independent agency that will make decisions based on facts and the public interest, rather than White House pressure.

Cross-Ownership Ban

Pai said there’s “no evidence” to support the FCC’s ban on media companies owning newspapers and broadcast TV stations in the same market. Pai suggested the FCC may knock down the ban while reviewing other agency rules on media ownership, including a market-based cap on broadcast station ownership.

“If it is more efficient for them to be able to collect news together and distribute it on different platforms,” he said of print and broadcast stations that share markets, “that could help them stay in business and provide a vital source of information for localities.”

Pai drew fire from Democratic lawmakers for declining to break from Trump’s Feb. 17 assertion on Twitter that some media outlets are “the enemy of the American people.” Udall and Sen. Maggie Hassan (D-N.M.) both asked Pai if he agreed with the president. Pai didn’t answer directly, but said he believes “every American enjoys the First Amendment protection guaranteed by the Constitution,”

[Alex Sherman and Todd Shields contributed to this report.]

To contact the reporter on this story: Kyle Daly in Washington at

To contact the editor responsible for this story: Keith Perine at

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Tech & Telecom on Bloomberg Law