The Communications Workers of America today is calling for prompt approval of AT&T’s proposed acquisition of Time-Warner saying that it would help create new competition to internet giants.
“This merger is about maintaining and creating good U.S. jobs and developing new and innovative ways to deliver technology and content” …. “A merged AT&T-Time Warner would provide much-needed new competition to companies like Google, Facebook and Amazon, where working people don’t have union representation.” said CWA President Chris Shelton.
Reuters reported that the US Justice Department demanded last week that AT&T divest DirecTV or Time Warner’s Turner Broadcasting unit in order to win approval of the deal.
CWA is completely opposed to “the Department of Justice – or whoever else’s – insistence that AT&T must divest CNN or DIRECTV, since we have a stake at both. This must be a decision-making process based solely on the merits of the case.” According to the CWA’s press statement.
The statement says that this is a classic vertical merger where video content produced by Time-Warner will be distributed by AT&T. According to the CWA, that should be approved by the Department of Justice just as the Comcast NBCUniversal merger was approved in 2011.
According to a note from Jonathan Chaplin, an analyst with New Street Research, a compromise was within reach with antitrust regulators, but now brinkmanship is coming into play.
“As AT&T has a strong case, it has less incentive to settle, and if the government is motivated by a desire to fulfill a Trump campaign promise, it has less incentive to settle,” Chaplin said in the research note.
AT&T Chief Executive Randall Stephenson denied last week that he had offered to sell CNN to win approval. He was quoted by Reuters as saying, “We’re prepared to litigate now” at a forum last week.
Similarly, according to Bloomberg, US PDonaldt Donalnd Trump said during his recent trip to Asia that the merger may go to litigation.
According to Chaplin’s note, approval of the deal remains likely, but the odds have worsened.