AT&T-Time Warner Antitrust Trial Starts, With Huge Implications for the Industry

WASHINGTON — The #antitrust trial over @AT&T’s proposed merger with @Time Warner started on Monday, a case that has huge ramifications for the future of Hollywood and other massive media mergers in an age of consumer disruption. The first morning was devoted to the question of just what types of evidence should be admitted into the case, but it also offered a glimpse of what will happen in the weeks ahead. AT&T CEO @Randall Stephenson and Time Warner CEO @Jeff Bewkes are expected to testify, and the government is planning to call executives at rival companies to argue that the transaction will harm their competitive positions. The Justice Department, which is suing to block the $85 billion merger, wants to enter a large number of emails from executives from both companies, including what one of the government’s attorneys, Eric Welsh, said would be “some very startling statements” from corporate executives. AT&T’s lead attorney Daniel Petrocelli argued that the DOJ shouldn’t be allowed to admit the emails unless it can call witnesses to establish their relevance. He also said that there is a question as to whether an email came from an employee who had authority at the company, noting that the government was seeking to admit 18 exhibits from one worker who was just out of business school. “There isn’t a one shoe fits all answer to this,” Petrocelli said. Leon has not said how he will handle the email admissions, but cautioned that just because something was written on a corporate account does not mean that it is a business record, and much more explicitly relevant to the case. Later in the morning, Welsh also argued for the admission of past statements that AT&T and DirecTV have made in the FCC’s merger reviews and other proceedings. When it sued to block the merger, the Justice Department used some of the quotes that AT&T made in an FCC proceeding in 2012, including that distributors that control programming “have the incentive and ability to use (and indeed have used whenever and wherever they can) that control as a weapon to hinder competition.”

https://finance.yahoo.com/news/t-time-warner-antitrust-trial-140136288.html

AT&T says Time Warner purchase could avoid FCC scrutiny

#ATT Inc expects to be able to bypass a powerful telecommunications regulator in its planned $85.4 billion acquisition of #TimeWarner Inc (TWX.N), the companies said in regulatory filings on Friday. Time Warner said that since it does not plan to transfer any Federal Communications Commission licenses to AT&T, it would likely not need FCC approval and would only need the consent of the U.S. Justice Department. AT&T could forego the FCC by unloading a Time Warner broadcast station, analysts say. Despite its big media footprint, Time Warner has only one FCC-regulated broadcast station, WPCH-TV in Atlanta. But it has other more minor FCC licenses. Time Warner said in its filing it does not anticipate it "will not need to transfer any of its FCC licenses to AT&T in order to continue to conduct its business operations after the closing."

http://mobile.reuters.com/article/idUSKBN14Q1UE

Here's why AT&T is buying Time Warner, and why it thinks the government can't stop the sale

#AT&T wants to buy #TimeWarner in a monster $85 billion deal, but some are concerned the government, particularly under Donald Trump, will move to block it. "In 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," Trump said while campaigning. AT&T, however, is telling Wall Street not to worry. At RBC's recent Technology, Internet, Media and Telecommunications (TIMT) Conference in New York, AT&T management suggested there wouldn't be any trouble with the merger.

The FCC question
One big reason AT&T is smiling is because the company believes the merger won't be under the jurisdiction of the FCC.

"The only scenario in which the FCC would have jurisdiction is if Time Warner transfers certain broadcast licenses to AT&T," RBC analyst Jonathan Atkin, who viewed the presentation by AT&T's Chris Womack and Michael Black, wrote. "The company believes these licenses (primarily business radio licenses and licenses related to Time Warner's ownership of the WPCN superstation) can be offloaded easily, obviating the need for an FCC review."

That would mean the merger would only need to clear the Department of Justice, which AT&T is optimistic about.

"The major difference between an FCC and DOJ review is that a DOJ review provides AT&T legal recourse while the FCC, if it chooses not to support the deal can defer the issue to an administrative law judge, a process that can last upwards of three years, usually resulting in the dissolution of the deal," Atkin wrote.

AT&T likes its odds, and expects the timeline on the merger to be 12-14 months.

Why Time Warner?
In the presentation, AT&T also outlined some of the rationale for the Time Warner deal.

Here's the most interesting bit: "AT&T hopes to strengthen its quad-play offering by zero-rating Time Warner content, which the company believes will provide consumers an incentive to adopt the AT&T bundle," Atkin wrote.

"Zero-rating" is when wireless carriers don't count data used with certain streaming services against your data cap. So for AT&T-Time Warner, it could mean that you never have to pay for data to watch HBO. You won't have to worry about data overages when you're watching "Game of Thrones."

This sounds great for the customer on the surface, but the FCC has said it has "serious concerns" about the way AT&T is using zero-rating, particularly with regards to its upcoming DirecTV Now streaming TV service

http://www.businessinsider.com/att-time-warner-merger-government-regulation-2016-11

Time Warner ruined AOL, says ex-AOL exec Ted Leonsis

#AT&T is planning to buy #TimeWarner for $85 billion, which has given several folks in the media world a heavy dose of déjà vu. Back in 2000, a $164 billion deal created #AOL Time Warner, unifying distribution and content along very similar lines to those now being preached by AT&T’s leadership. The results were disastrous. And one of the guys who was there — longtime AOL executive Ted Leonsis — said in hindsight that buying Time Warner wrecked the company’s momentum. “There was friction in the system, even though the base idea [was right:] Convergence, that everything on paper, everything on plastic would become Xs and Os and would be delivered on a platform if you had everyone’s credit card,” Leonsis recalled on the latest episode of Recode Decode, hosted by Kara Swisher. “And you could stream things, because AOL was a private internet. We were the original cloud-based service. But it was just such a big merger and it became so distracting.” For example, after buying instant messaging company ICQ, AOL had been planning to build telephony features into a future messaging product. However, Time Warner put the kibosh on that. “The cable company had its triple play going, so, ‘Oh, you can’t do that,’” he said. “All of a sudden, we went from being young, nimble, playing offense, to really being a defender. And I didn’t like that.” Leonsis was interviewed in September, before the AT&T-Time Warner deal was announced. Now a majority owner of several sports teams and investor in tech companies around the country on behalf of Revolution Growth, he acknowledged that one of AOL’s big mistakes was deciding to become a next-generation media company instead of buying up other nascent internet startups like Amazon, Yahoo or Google.

http://www.recode.net/2016/10/26/13413444/ted-leonsis-aol-time-warner-acquisition-recode-decode-podcast

The Corporate Confidence of the AT&T-Time Warner Deal

By many measures, this should be a moment of great economic uncertainty for the corporate world. The United States election looms. Interest rates are set to rise soon. Britain plans to leave the European Union. China’s economic growth is slowing. Cyberattacks are on the rise. And Russia is flexing its military muscle in the Middle East. Any one of these factors would usually be enough to give chief executives pause. The men and women who run the world’s largest corporations are nothing if not cautious. Yet across industries, there are surprising signs of confidence, with corporate chieftains and directors signaling their belief that the upswing will continue for months or even years to come. Investors are betting on sustained growth. Companies are hiring. And huge mergers and acquisitions are back in fashion. On Saturday night, #AT&T said it planned to acquire Time Warner for $85.4 billion — the biggest deal of the year. On Friday, British American Tobacco offered $47 billion for the portion of Reynolds American that it does not already own. And this week, the chip maker #Qualcomm is expected to make a $37 billion offer for the rival company #NXP Semiconductors. Such megadeals are often postponed during times of political or economic uncertainty. Yet at what feels to many like a tumultuous moment for the global economy, many corporate titans apparently see smooth sailing ahead.

http://mobile.nytimes.com/2016/10/24/business/dealbook/att-time-warner-deal-confidence.html?referer=https://www.google.com/

AT&T Discussed Idea of Takeover in Time Warner Meetings

Senior executives at #AT&T Inc. and #TimeWarner Inc. have met in recent weeks to discuss various business strategies including a possible merger, according to people familiar with the matter. The talks, which at this stage are informal, have focused on building relations between the companies rather than establishing the terms of a specific transaction, the people said, asking not to be identified as the deliberations are private. Neither side has yet hired a financial adviser, the people said. Acquiring Time Warner would give AT&T, one of the biggest providers of pay-TV and of wireless and home internet service in the U.S., a collection of popular programming to offer to subscribers, from HBO to NBA basketball to the Cartoon Network. AT&T CEO Randall Stephenson has been looking to add more content and original programming as part of his plan to transform the Dallas-based telecommunications company into a media and entertainment giant.

http://www.bloomberg.com/news/articles/2016-10-20/at-t-said-to-discuss-idea-of-takeover-in-time-warner-meetings

Time Warner is buying 10 percent of Hulu for around $600 million, and will join Hulu’s new pay TV service

After months of talks, #TimeWarner is buying a chunk of #Hulu, the web TV service. The deal means Time Warner will be partners with existing owners #Disney, 21st Century Fox and #Comcast ’s NBCUniversal*, and that Time Warner’s channels like Turner and CNN will be part of a new pay TV service Hulu wants to launch next year. Time Warner says it is buying a 10 percent stake in Hulu; a person familiar with the deal says it is putting in around $580 million (Update: Make that $583 million, per Time Warner’s CFO, during the company’s earnings call this morning) for that stake, which values the entire company at $5.8 billion. Hulu, which industry sources estimate is losing hundreds of millions of dollars a year, had originally wanted Time Warner to buy as much as 25 percent of the company.

http://www.recode.net/2016/8/3/12366680/time-warner-hulu--580-million?mkt_tok=eyJpIjoiTVRsbFlUUTFOVEV4TkRneSIsInQiOiJpb3FTdXdXRU81WXQ4Nng5c3E2ckNDekE2Y1YxZG9xalBiRVFUenNMckxZcmFXaFpDbzlNb1JMUVhmcHp3eEFyTmlWXC8weUZPWlpsd0RvY2RqMVZWWFwvbjVjV1RVNitVdE41Uk1IU25FXC9zMD0ifQ%3D%3D

Dell Swells NIA's Ranks

#Dell is the latest big name to join the ranks of the New IP Agency ( #NIA ), a not-for-profit initiative aimed at fostering the development of virtualized IP networks based on open-access principles.

In common with other major industry names, such as #Cisco Systems, #Deutsche Telekom, #Huawei Technologies, #Juniper Networks, #Nokia, #TimeWarner Cable, #ZTE and many more, Dell Inc. (Nasdaq: DELL) has identifiedThe New IP Agency as an industry body that, through its testing, information sharing and community activities, can help the communications networking community develop and adopt next-generation capabilities and processes quickly and efficiently. (SeeZTE Commits to 'Openness' With NIA Membership.)

"Open, interoperable solutions lie at the heart of our future-ready vision for service provider and enterprise customers alike and are key to unlocking the full potential of technology," says Tom Burns, vice president and general manager, #DellNetworking and Enterprise Infrastructure. "We wholeheartedly believe in the NIA's mission to accelerate the journey towards truly open, interoperable and profitable virtualized IP networks and services. We're excited to take part in this initiative and help shape its direction and value for customers globally."

Jeff Hannah, director of the NIA, said: "The NIA welcomes Dell's commitment to the development of open and interoperable virtualized IP networks. As one of the leading vendors of networking solutions, Dell will be an invaluable contributor to the mission of the NIA, contributing expertise in the service provider and enterprise markets, both of which will benefit from the work of the NIA."

http://www.lightreading.com/nfv/nfv-strategies/dell-swells-nias-ranks/d/d-id/721624