In Washington, the biggest question about the AT&T-Time Warner merger is whether it will be reviewed by the Federal Communications Commission. If recent investor reports are right, the FCC won’t have any reason to scrutinize the deal.
Like all large mergers, it’s subject to review by antitrust authorities. Review by the FCC, however, is contingent on the transfer of licenses that implicate the agency’s “public interest” standard. Although no one has seen the list of Time Warner licenses that might be transferred, according to RBC analyst Jonathan Atkin, the companies have indicated that Time Warner is considering divesting itself of licenses before any transfer occurs. If no FCC licenses are transferred to AT&T, the FCC has no jurisdiction to review the AT&T-Time Warner merger.
It’s important to keep two things in mind with respect to review of mergers like this. First, the merger will be reviewed in detail by the federal government whether or not the FCC is involved. It will definitely be reviewed by the Department of Justice, which is the lead expert agency on mergers. Second, turning in incidental FCC licenses ahead of a merger to clean up questions around regulatory review at the FCC is not unusual. DreamWorks Animation voluntarily canceled an FCC license two days before its acquisition by Comcast was announced in April, and the deal was approved by the Department of Justice in June with no FCC review. It would have been absurd for the FCC to deny DreamWorks’ request for cancellation just so the FCC could exercise jurisdiction over a deal it would otherwise have no reason to review — that would have been an evasion of the law giving the FCC a limited role in merger reviews.
Full Content: Forbes
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