Time Warner hits 52-week high after FCC chairman says he doesn’t expect to review the AT&T merger

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Time Warner CEO Jeff Bewkes
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Thomson Reuters

Time Warner stock hit a 52-week high after Ajit Pai, President Trump’s FCC chairman, said he didn’t think his agency would review its $85 billion merger with AT&T, during an interview at Mobile World Congress in Barcelona.

Pai said “he understood the companies have structured the deal so that no airwave licenses would be transferred, something that would trigger a broad FCC review,” the Wall Street Journal reported.

“That is the regulatory hook for FCC review,” Pai said, according to The Journal. “My understanding is that the deal won’t be presented to the commission.”

The stock was up 1.4% in the aftermath of the news, and hit a 52-week intraday high of $98.32.

The AT&T-Time Warner deal has invited a lot of media speculation, as Trump railed against it on the campaign trail, and has repeatedly taken shots at CNN, which Time Warner owns. Trump has met with AT&T CEO Randall Stephenson multiple times since taking office.

But AT&T has maintained that it is optimistic the deal will survive government review.

There are two potential government groups that might have a say in whether the deal AT&T goes through: the FCC and the Department of Justice (DOJ).

The FCC is by far the bigger threat, since it has a broad mandate to kill mergers it thinks aren’t in the “public interest,” and can also put restrictions on the merger. The DOJ, on the other hand, has to actually prove the deal is anti-competitive, which is a taller order.

But AT&T believes the merger won’t be under the jurisdiction of the Federal Communications Commission.

“There will not be a filing with the FCC,” Stephenson said earlier this month. “We’re going to assume no [FCC] licenses from Time Warner.” Under the purview of the FCC, Time Warner only has WPCH-TV, a broadcast station, and a few smaller licenses, Reuters reported. Those will not transfer.

Pai seems to be satisfied with this, and is signaling that his agency will not try and step in.

“We still think we’ll be closed by end of year,” Stephenson said earlier this month.

On the campaign trail, Trump railed against the merger. “As 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 in a speech in October.

Trump’s negative view of the deal comes “partly from his frustration with CNN, which is owned by Time Warner, one of the people said,” according to Bloomberg.