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AT&T, Time Warner Chiefs Grilled on Donald Trump’s Campaign Promise to Block Merger

Variety logo Variety 12/7/2016 Ted Johnson
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The CEOs of AT&T and Time Warner faced a Senate hearing on their $85 billion proposed merger on Wednesday, and at one moment were questioned about President-elect Donald Trump’s campaign statement that he would oppose the transaction.

Sen. Richard Blumenthal (D-Conn.) suggested that Trump’s threat during the campaign to block the merger was motivated by unhappiness over the way that CNN, a unit of Time Warner, covered his campaign.

“To threaten more vigorous or adverse enforcement against a company because he doesn’t like the news coverage is a threat to the First Amendment,” Blumenthal said.

AT&T CEO Randall Stephenson and Time Warner CEO Jeff Bewkes each said that CNN’s news coverage would not be impacted by what Trump says about the merger. But they avoided criticizing the incoming administration.

When Blumenthal asked them whether they agreed with him that it was “abhorrent” for a public official to threaten to block the merger because of the news coverage of one its networks, Stephenson said, “I am a novice in the world of politics and I have struggled to engage at that level.”

Bewkes noted that a number of politicians, including Bernie Sanders, weighed in on the merger after it was announced.

On the October weekend when the merger was unveiled, Trump told a crowd at a rally that “as an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few.”

Since then, some of Trump’s appointments to his transition team have raised speculation on Wall Street that, despite Trump’s campaign statements, the merger may ultimately be viewed more favorably by the Department of Justice, which is tasked with reviewing the transaction. Stephenson said that he had not talked to Trump’s transition team.

Blumenthal said that he has “yet to be convinced that the benefits outweigh the harms to competition and consumers,” and on that level would agree with Trump. But he said that “I may well agree with Trump,” but “what concerns me is the reason he gave, which is that he is very unhappy with the CNN news coverage.”

At the hearing before a Senate antitrust subcommittee, Stephenson and Bewkes argued that the transaction would disrupt the marketplace in a way that will benefit consumers. Stephenson pointed to AT&T’s DirecTV Now as an example of how its acquisition of the satellite firm has led to greater innovation and more choices. DirecTV Now offers a smaller bundle of 100 channels at $35 per month.

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