AT&T-Time Warner Merger: Senate Democrats Ask Department Of Justice To Block Merger

A group of senators urged the U.S. Department of Justice and the Trump administration Wednesday to block a proposed merger of telecommunications giant AT&T and content producer Time Warner.

The group, led by Al Franken, D-Minn., sent a letter to the office of Attorney General Jeff Sessions advocating the Justice Department intervene on the $85.4 billion acquisition on grounds the deal would allow AT&T to “engage in a wide variety of behaviors that would harm competition in the media market.”

Read: AT&T-Time Warner Merger: CEO Expects Deal To Go Through By Year's End

The letter was signed by Sens. Ed Markey, D-Mass.; Elizabeth Warren, D-Mass.; Ron Wyden, D-Ore.; Richard Blumenthal, D-Conn.; Jeff Merkley, D-Ore.; Maria Cantwell, D-Wash.; Sherrod Brown, D-Ohio; Tammy Baldwin, D-Wis.; and Cory Booker, D-NJ. Bernie Sanders, I-Vt., was the lone signatory who is not a member Democratic party. No senate Republicans signed the letter.

The senators said AT&T’s potential acquisition of Time Warner would run the risk of creating a “mega media conglomerate” that would put AT&T in a position to pose a number of problems in terms of access to as well as pricing and quality of content for consumers.

Were the purchase allowed to go through, AT&T would take control of Time Warner’s content networks including HBO, CNN and Turner channels like HLN, TBS and TNT. The senators said this would put the telecommunications company in a position to have undue control over a significant portion of premium content and information sources.

The senators suggested AT&T could favor its own content over competitors and — because it acts as a distribution network for other content as a cable and internet service provider — could hinder the ability of other channels and content creators to reach an audience.

Read: AT&T-Time Warner Merger: FCC Chairman Doesn't Expect To Review Deal

Net neutrality issues are also at the center of the senators’ worries — in particular, AT&T’s potential to violate bright-line rules that prohibit paid prioritization that would provide favoritism to certain types of content.

In AT&T’s case, it could zero-rate its own content — offering it to users for free without it counting against their data caps on the AT&T network — while other services would have to pay for similar access.

Such a practice would provide a significant benefit to AT&T-owned content, though the net neutrality rules that would prevent such a practice may be rolled back by Federal Communication Commission Chairman Ajit Pai. Sen. Ron Johnson, R-Wis., has suggested paid prioritization could provide benefits to consumers and should be allowed.

Former FCC Chairman Tom Wheeler warned against the potential for such violations if a merger between AT&T and Time Warner was allowed and suggested the commission may challenge the acquisition. Pai has not expressed any interest in following through on Wheeler’s position and has said he has no plans to review the merger.

AT&T reportedly was convinced after meeting with the transition team set up to staff the Trump White House after the election that its purchase of Time Warner would go off without a hitch. Earlier this year, AT&T CEO Randall Stephenson said he expects the merger to be completed before 2018.