Donald Trump was clear when he promised to block the proposed AT&T-Time Warner merger last month, describing the purchase as “a deal we will not approve in my administration because it's too much concentration of power in the hands of too few." But without knowing who President-elect Trump will choose to lead the Justice Department and the agency’s antitrust division, it’s unclear if the campaign pledge will serve as a negotiating tactic or the deal’s death knell.
This spring, former Trump Campaign Chair Paul Manafort explained that Trump’s proposal to ban Muslims from entering the country was a negotiation tool rather than an earnest plan. “He operates by starting the conversation at the outer edges and then brings it back towards the middle,” Manafort said in May. “Within his comfort zone, he’ll soften it some more.” Some of Trump’s supporters have absorbed that logic too, expecting from the next President not so much a literal wall between the United States and Mexico as the spirit of tougher immigration enforcement.
And so with the AT&T merger, President Trump’s words on the campaign trail will be tested against his deeds in the White House. BTIG analyst Rich Greenfield told BuzzFeed News that it’s an open question whether Trump’s stance on the deal was a politician’s posturing or a hard and fast policy position. “Is he a traditional Republican — laissez-faire — or is he a populist?” Greenfield said. “Politicians often say things on the campaign trail that never pan out in reality. I don’t think we have any way of knowing.”
As part of the proposed deal, AT&T must pay Time Warner $500 million if regulators halt the marriage. Analysts will closely watch for who Trump will appoint to lead the Department of Justice and the Federal Communications Commissions, which is the government’s chief telecom regulator.
One source who has worked on previous media mergers pointed to Trump’s professed pragmatism to predict how he might evaluate the acquisition; he is all about the “the Art of the Deal,” the person said, referring to Trump’s 1987 best selling book. Rather than take Trump’s unequivocal rejection of the merger as a sign of things to come, the source noted that his aggressive stance could force AT&T to cut a better deal for American consumers.
But critics of mega-mergers like Sen. Elizabeth Warren have criticized the government’s approval of such deals, even when companies agree to special conditions in order to minimize harm to customers. Advocates and lawmakers say firms can violate these conditions, which are generally difficult to enforce.
Todd O’Boyle, director of the Media and Democracy Project at Common Cause, told BuzzFeed News that even if you take Trump’s comments at face value, the Justice Department would still have to build its own legal case to challenge the AT&T merger. “On the one hand, Mr. Trump was very critical of the merger when it was announced; on the other hand, regulators will still have to go through a process and come to a conclusion,” he said.
Other observers have suggested that Trump’s opposition to the AT&T deal has more to do with a vendetta against the news media (Time Warner owns CNN) than with a reinvigorated approach to antitrust enforcement. In his opposition to network neutrality, and his clashes with some of the tech industry’s biggest players like Amazon’s Jeff Bezos and Apple’s Tim Cook, analysts have suggested that the Trump presidency could swing in favor of incumbent telecom giants over the tech titans of Silicon Valley, a group seen as largely untouched under Obama’s watch.
While the Clinton campaign joined Congressional Republicans in saying AT&T’s proposed merger deserves a close look, the Democratic nominee did not vow to block it, as Trump did.
AT&T tried to make the best out of Trump’s unexpected victory. The company referred BuzzFeed News to a statement from its CFO John Stephens. “From a company perspective, we really look forward to working with President-elect Trump and his transition team,” he said.