Saturday’s announcement by AT&T Inc. (NYSE:TC) that it had reached a deal to acquire Time Warner Inc. (NYSE:TWXC) for $85.4 billion in cash and stock was only the beginning of what some suspect will be a tidal wave of concern.
In fact, one observer described what is yet to come as a “regulatory brawl.” That’s probably not an overstatement given the lengthy list of potential objectors.
Although neither the Justice Department nor the Federal Communications Commission has commented on the deal, experts have already begun to list anticipated arguments.
Concerns range from potential problems monitoring and enforcing any agreement – given the size and scope of the new company - to whether AT&T would favor Time Warner content over content from other suppliers - to concerns about higher prices and more.
At the very least many experts suggest AT&T would likely be forced to agree to conditions by the Justice Department and also face pushback from the FCC as well as a public interest review.
Washington lawmakers have already responded to the announcement. Presidential candidate Donald Trump said that, if elected, he wouldn’t approve the deal “because it’s too much concentration of power in the hands of too few.”
Former candidate Bernie Sanders tweeted Sunday, “This deal would mean higher prices and fewer choices for the American people.” Sanders called for the Obama administration to block the acquisition.
Others, including Democratic Vice Presidential nominee Tim Kaine said he shared concerns raised by Minnesota Sen. Al Franken who voiced opposition and said, “Pro-competition and less concentration, I think, is generally helpful, especially in the media.”
CNN posted a quote from Hillary Clinton spokesman, Brian Fallon, saying, "there are a number of questions and concerns that rise ... about this announced deal, but there is still a lot of information that needs to come out before any conclusion should be reached."
The Dallas Morning News also indicated that a group representing small cable operators feared restricted or much more expensive access to Time Warner programming if the deal goes through without safeguards.
Concerns from consumers included fears AT&T would renege on any promises it made, citing the company’s purchase of Cingular Wireless as an example.
Jeff Chester, director of the The Center of Digital Democracy, pointed out that all of the viewership data that Time Warner has would flow to AT&T.
According to Chester, "You're talking about using content to deepen their relationship with consumers, in order to help advertisers and generate more data. What you're really talking about is its ability to expand its digital dossier on each and every person and these dossiers are now used in real time."
Randall Stephenson, AT&T Chief Executive, speaking about the proposed deal, said, “It is going to have to go through a regulatory review process that is dictated by rules, regulations and laws. I can’t control what the politicians say and feel about it.”
In general, Stephenson played down objections from lawmakers and others and indicated AT&T’s position was that this was a combination of a distributor and a content provider, not the kind of deal regulators usually take issue with.