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Although a final decision on AT&T Inc.’s (NYSE:TC) proposed takeover of Time Warner Inc. (:TWXN/A) isn’t expected until near the end of 2017, Wednesday’s Senate hearing on the matter closes the gap just a little more.

President-elect Donald Trump has already said his administration would block the $85.4 billion deal because, according to Trump, it would be “too much concentration of power in the hands of too few.”


DOJ Decides

Actually neither Trump nor Congress will decide whether the merger happens. That will be up to the Department of Justice and possibly the Federal Communications Commission. The new President has said he will appoint Sen. Jeff Sessions as Attorney General in charge of the Justice Department.

Although Trump has expressed skepticism at the merger, it is not known how Sessions might handle the deal if he is appointed Attorney General. AT&T and Time Warner would prefer a hands-off approach, more typical of Republicans like Sessions. Others worry that there has been too much consolidation already, which could influence the Justice Department to hold back.

FCC Cares Too

The Federal Communications Commission (FCC) has already gone after AT&T for enabling its cellphone customers to stream DirecTV content without having it count against their monthly data caps.

The fear is that the move by AT&T to keep DirecTV content exempt from data caps shows that AT&T would favor its own programming at the expense of content provided by a rival such as Netflix Inc. (NASDAQ:NFLXC).

All In Favor

AT&T CEO, Randall Stephenson and Time Warner counterpart, Jeffery Bewkes, attempted to convince senators that the $85.4 billion deal would ultimately be good news for customers.

The main theme was that by combining a major content distributor and content producer would result in lower costs for consumers.

Stephenson said the deal would not eliminate competition but would actually increase competition with cable companies.

Said Stephenson, "Our intent is to disrupt the existing pay-tv model. We want to get the most content to the most people at the lowest cost. And we want consumers to pay for their content once and then watch it anywhere at any time. Every episode, every season on whatever device they choose."


The View From Out Yonder

In an interesting twist, it appears rural America, which Trump won with a 62% margin, is in favor of the AT&T/Time Warner merger that Trump opposes.

AT&T is considered one of the leading providers of services to rural America, so a larger, more robust AT&T means more content delivered to the heartland. In addition, companies like Rural Media Group, in independent media company that provides television service to 52 million homes in the U.S. and more than 100 million worldwide, sees the merger as way to connect rural America with city centers.

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