AT&T Spending Millions to Convince Washington Time Warner Deal Won’t Hurt Consumers

January 27, 2017, 12:00 PM UTC
Photo by SAUL LOEB—AFP/Getty Images

AT&T has racked up quite a bill for its calls on the government.

The communications giant spent nearly $16.4 million on lobbying efforts in 2016, $3.7 million of which came after the October announcement of its proposed $85.4 billion merger with Time Warner (TWX), according to federal lobbying disclosure forms, which were first reported by The Hill. In fact, only four other corporations spent more on lobbying efforts in the fourth quarter than AT&T.

Last year, Fortune reported that Time Warner had hired Christine Varney, the former head of the U.S. Department of Justice’s anti-trust division under President Obama, to help it get its merger approved by regulators.

Outlaying cash to sway government opinion seems to be AT&T’s modus operandi when trying to push a major merger through. The last time the company spent so much money on lobbying was when it tried to merge with T-Mobile in 2012, spending $17.5 million. That merger was approved by the Department of Justice, but was ultimately blocked by the Federal Communications Commission.

AT&T (T) had spent $14.9 million on lobbying in 2015. Other areas the company focused its money on included arbitration in consumer contracts, the Email Privacy Act, and security.

President Trump vowed to fight the Time Warner merger during a campaign speech in October, saying it concentrated too much power in hands of few. Although there have been indications he still feels the same way, he did say last week that he hadn’t seen all the facts on the issue, which implies he may be open to letting the deal go through. Although the proposed merger will still have to clear the DOJ, it will not have to face scrutiny from the FCC because Time Warner’s FCC licenses will not be transferred in the deal.

Even without the extra hurdle, and despite the fact that AT&T’s communications business does not compete with Time Warner’s media business in any major way, the companies may have to sell assets to complete the merger. One problem in particular: CNN. The news channel is an asset of Time Warner’s, and President Trump has repeatedly complained about the network’s coverage of him, specifically citing it in his October campaign speech railing against the deal. He has referred to the channel as “fake news” the channel reported on the existence of an intelligence dossier that contained embarrassing unproven information about President Trump. AT&T says it remains committed to the network, and would fight against attempts to require its sale.

This year AT&T may keep its foot on the gas in terms of lobbying, regardless of whether or not the merger gets approved. New chairman of the FCC Ajit Pai, who was just appointed by President Trump earlier this week, has previously promised to end net neutrality, which would allow internet service providers to charge content providers for the speed of their bandwidth. If Chairman Pai eliminates net neutrality as expected, AT&T and other communications players will find themselves jockeying for position to shape the impending new rules in a way that is most favorable to their specific strengths and interests.

Read More

CryptocurrencyInvestingBanksReal Estate