AT&T In Talks to Purchase Time Warner, Will Certainly Spark FCC Investigation - The UpStream

AT&T In Talks to Purchase Time Warner, Will Certainly Spark FCC Investigation

posted Saturday Oct 22, 2016 by Scott Ertz

AT&T In Talks to Purchase Time Warner, Will Certainly Spark FCC Investigation

Over the past couple of years, the nature and role of telecom companies has changed dramatically. In the past, a telecom was expected to provide wireline access to the premises, or wireless access over a cellular network. In the past few years, though, these telecoms have begun to make some big purchases to change the game.

In the past, we have seen cable companies purchase content producers, such as Comcast purchasing full stake in NBC Universal in 2010, or Time Warner purchasing Turner Broadcasting in 1996. This move gave these service providers access to the full vertical for their industry. Today, traditional telecoms, such as Verizon and AT&T are beginning to go the same direction; rather that just owning the pipes, they also own the content carried by those pipes.

Last year, Verizon made a surprise purchase of AOL, reminding the world that AOL still existed. Only 3 months ago, they also announced that they would be adding Yahoo to their portfolio, though that purchase may be in trouble today. In a similar, yet very different move last year, AT&T announced their purchase of DirecTV, a move that prompted the company to transition their U-Verse branding to DirecTV.

This week, AT&T is in talks to increase the footprint of what is now their DirecTV division through a potential acquisition of Time Warner. Unlike their DirecTV acquisition, however, bringing Time Warner into their portfolio will add content, not just new distribution channels. Time Warner owns a number of high profile content producers, including HBO and, as mentioned previously, Turner Broadcasting. This would give AT&T direct access to HBO Go and HBO Now, as well as exclusive broadcasting rights for ELEAGUE Gaming.

What might AT&T have planned for a merger like this? Bundled services, for one. After the purchase of DirecTV, we saw AT&T offer unlimited data on their Mobility brand to certain customers of their DirecTV brand. It would not be unreasonable for the company to include HBO in their DirecTV brand, or even HBO Now in their Mobility brand.

Of course, all of this is speculation, on top of theory, as there has been no agreement reached for this purchase. Even if an agreement is reached, there will be heavy regulatory approval required before the purchase can be made. While the DirecTV purchase was fairly easy for the company, combining U-Verse, DirecTV and Time Warner into a single operating unit will spark an FCC investigation that will likely rival the investigation that ultimately ended their attempted purchase of T-Mobile.


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