AT&T engages Washington firepower with its megadeal

Bloomberg

AT&T Inc.’s $85.4 billion bid for entertainment titan Time Warner Inc. is where few imagined it would end up—hurtling towards a make-or-break moment in Washington with a pro-business Republican administration that shows signs it may reject the deal.
Dallas-based AT&T is fighting an increasingly public battle with Justice Department antitrust officials, who have questioned whether the combined company would wield too much power. After months of quiet talks with officials, Chief Executive Officer Randall Stephenson vowed to investors that it won’t
sell the CNN unit that has drawn President Donald Trump’s ire.
Lobbyists for the telecommunications giant are increasing their outreach to Congress as it becomes clear the merger is meeting resistance, according to people familiar with the company’s messaging. Among their talking points: the deal would marry companies that do different things, which normally doesn’t require as much scrutiny as transactions between direct competitors, the people said.
“We’re in a completely different phase” from a few weeks ago, said Blair Levin, a former Federal Communications Commission chief of staff. “Both sides need to simultaneously work towards a settlement, while at the same time laying the groundwork to win in court.”
AT&T sent several representatives to a congressional hearing with Attorney General Jeff Sessions during which the merger came up, and some of those people went up on the dais to talk to lawmakers during the break.
Sessions was asked during the House hearing whether the White House or anyone on behalf of the Trump administration had contacted him about the proposed merger and asked for the sale of Turner, the Time Warner unit that owns CNN, as a condition for approval. “I cannot accept the accuracy of that news report,” Sessions responded. “Our work is professional.”
Asked later in the hearing whether any White House employee has contacted the Justice Department to interfere with or discuss the AT&T deal, Sessions said he was unable to comment on “conversations or communications that Department of Justice top people have with top people in the White House.”
Representative John Conyers of Michigan, the top-ranking Democrat on the House Judiciary Committee, and Representative David Cicilline of Rhode Island called for hearings on what they called the Trump administration’s “troubling pattern of potential political interference.”
For AT&T, the fight may evoke unhappy memories of another bruising Washington round six year ago, when regulators forced the telecommunications provider to drop plans to buy smaller wireless company
T-Mobile US Inc. for $39 billion.
Then, as now, the company had a powerful lobbying corps. Now many of its roughly 100 members are fighting for a deal that would give AT&T control of not only CNN, but also a movie studio, HBO, and Turner TV networks such as TBS.
Those units would provide content for AT&T’s distribution operations such as DirecTV and its internet video network, and the company aims to use its data on viewership habits to offer highly targeted advertising.
In the third quarter of 2017, AT&T spent $4.43 million on influencing the federal government, making it the biggest spender among single companies for the period, according to disclosures. It has been in the top three spenders for the last three quarters.
Overall, it spent $13.17 million on lobbying in the first three quarters of the year, up from $12.66 million during the same period in 2016, according to the disclosures.
Fletcher Cook, a spokesman for AT&T, declined to comment.
Trump as a candidate vowed to block the deal and since taking office has been critical of CNN’s coverage of his presidency. He said during his recent trip to Asia that the merger may go to litigation.