The Sad Way Trump’s War with CNN Could Keep Cable Cheaper

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This week, President Trump’s senior advisor and son-in-law Jared Kushner reportedly met with Time Warner executives to complain about CNN’s coverage of the president. Any visit from a White House official seeking to stifle journalists is disturbing. But Time Warner, which owns CNN, has another problem that’s all tied up in presidential politics. The cable and entertainment giant is seeking to sell itself to AT&T, a mega-merger that would require federal approval.

Now, nobody is yet saying what Kushner and the execs talked about. But it’s easy to imagine a conversation that sounded a little like, “Gee, it would be a shame if anything were to happen to your nice little merger, wouldn’t it?” (The White House and Time Warner didn’t return requests for comment.) Theoretically at least, Trump could threaten to withhold approval of the deal if CNN didn’t get on the Trump train.

It’d be a move in keeping with the kind of vindictiveness and vanity the president has evinced in other circumstances. Oh, and yes, it would be corrupt. But it would also be great for consumers. A scuttled deal would keep the cable market more competitive, strike a blow against transnational media oligopolies, and keep prices down.

“The way that antitrust is supposed to work is that you have professionals who are working from principled guidelines to keep these decisions out of the realm of politics,” says Barry Lynn, author of Cornered: The New Monopoly Capitalism and the Economics of Destruction and the head of the New America Foundation’s Open Markets program. “But the antitrust process can’t be completely apolitical.”

‘The antitrust process can’t be completely apolitical.’

When large companies merge, they must notify the Department of Justice and the Federal Trade Commission, which will either decide not to intervene in the merger at all or to review the deal. If the agency reviews the deal, either the FTC or the DOJ’s antitrust division will have to decide whether to block it, approve it with special conditions, or simply allow it to proceed. In this case, the DOJ would most likely handle the review because it has more expertise in media and communications mergers.

In theory, the DOJ’s antitrust division is independent of the president and politics in general. But the division’s overall direction is set by an assistant attorney general who is appointed by the attorney general proper, who is in turn appointed by the president. (Attorney General Jeff Sessions has yet to nominate anyone for the role, which is now being temporarily filled by a holdover from the previous administration.) Still, the president and AG seldom intervene in specific antitrust cases. Rather, they appoint people who generally favor their approach to regulation. “The reason the attorney general is a cabinet-level position is so that the Department of Justice is in line with the president at a policy level,” says Jeff Blumenfeld, an antitrust lawyer who worked for the antitrust division in the 1970s and 1980s.

Democrats might typically favor a DOJ that is skeptical of mega-mergers, while Republicans appoint staff less inclined to intervene. But Trump isn’t against mega-mergers in and of themselves. For example, he spoke highly of Monsanto and Bayer’s proposed merger earlier this year. The case of AT&T and Time Warner may be less about policy and more about personal spite, and it’s harder to appoint staff who will simply go along with a vendetta.

Even assuming Sessions agrees with the president and seeks to block the AT&T-Time Warner merger while, say, approving Bayer-Monsanto, he would need to find an assistant attorneys general who also agreed. And that would mean asking for their opinions about about these specific cases before anyone had even flagged them for review, much less investigation. “It would be crazy to pick someone for their view of a single antitrust case,” says Scott Wagner, an antitrust lawyer at the firm Bilzin Sumberg.

Deal Appeal

The DOJ isn’t the president’s only avenue for blocking the merger, however. The Federal Communications Commission may also review the AT&T/Time Warner deal, though it’s not yet clear whether the merger would fall under the agency’s authority. The current FCC headed by Republican Ajit Pai would not likely block the deal, since Pai favors a more hands-off approach at the FCC. Pai and his Republican colleague Michael O’Rielly both previously voted against Charter’s acquisition of Time Warner Cable (a separate company), but they mainly opposed the conditions the FCC posed on the merger rather than the deal itself.

Even so, two of the FCC’s five seats are open, one for a Republican and one for a Democrat. Trump gets to pick the nominees for both seats, and the Senate much must approve them. Trump could, in theory, pick a Republican commissioner more skeptical of corporate consolidation. If this new, hypothetical Republican commissioner and both Democrats voted against the AT&T/Time Warner merger, they could stop it. But once again Trump would have to handpick an appointee based on that person’s view of a particular case.

Yet Trump might not need appointees who already agree with him at all. Presidents have often been accused of influencing agency decisions through speeches or comments to the press. And as the world saw when he fired interim Attorney General Sally Yates, the president has no qualms with firing staff who don’t toe the line. Even then, however, the companies could appeal the decision the courts. Given Trump’s statements about the merger—and about CNN in particular—it wouldn’t be hard for AT&T to make the case that the decision was made because Trump had a vendetta against Time Warner.

At this point, thanks to Kushner’s visit, any move by the DOJ or the FCC to block the merger would end up looking political. That’s too bad, because there are plenty of good reasons to be skeptical of the deal. AT&T could hike the rates that other pay TV providers have to pay to provide channels like HBO and CNN. It could refuse to license that content to streaming video services. It could give Time Warner an edge over competitors on its wireless network by exempting its content from data caps. All that stands to get lost in Trump’s petty war on the press.

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