Published: Sat, November 11, 2017
Finance | By Loren Pratt

US, AT&T at odds over CNN in Time Warner deal

US, AT&T at odds over CNN in Time Warner deal

Rupert Murdoch telephoned AT&T Inc (N:) Chief Executive Randall Stephenson twice in the last six months and talked about cable network CNN, sources briefed on the matter told Reuters on Friday.

It's not clear if the executive chairman of 21st Century Fox was interested in purchasing CNN or if Murdoch was simply gathering information.

Murdoch, 86, phoned AT&T chief Randall Stephenson on May 16 and again on August 8, both times asking if CNN was for sale, according to one source.

According to reports, the Justice Department has required AT&T and Time Warner to relinquish either Turner Broadcasting - which includes CNN - or DirecTV, for the merger to be approved.

USA antitrust regulators and AT&T Inc sparred on Wednesday over whether the wireless carrier would be required to sell Time Warner Inc's CNN cable network as a condition of approval of its deal to buy the media company.

Trump's comments have provoked concern that he may improperly influence the Justice Department to block the deal. As president, Trump has often blasted CNN for its coverage of him and his administration, disparaging it and its reporters as "fake news".

As for DirecTV, "it's a false choice", one of the sources said, portraying the talks as created to disguise an attempt to punish CNN.

Justice Department sources told The Hill and other outlets earlier this week that AT&T had offered to sell CNN from the combined company to get the merger approved by regulators. "While we won't comment on our discussions with DOJ, we see no reason in the law or the facts why this transaction should be an exception".

Even if AT&T prevails in court, the government's tough stance could have a chilling effect on other deals that would need its approval. In the first major test of its approach to merger reviews in the Trump era, the Justice Department has pushed back against AT&T Inc.'s $85.4 billion takeover of Time Warner Inc., throwing the deal into jeopardy.

"Are we really going to make the (Justice Department) use antitrust law to force the sale of a cable channel because the President doesn't like its news coverage?" tweeted Jessica Rosenworcel, a Democratic member of the Federal Communications Commission.

The deal is opposed by an array of consumer groups and smaller television networks on the grounds that it would give AT&T too much power over the content it would distribute to its wireless customers. A Fox deal with CNN could also raise antitrust concerns because of the market share that a combined company would have among cable news viewers. That's raising red flags for some who worry that the White House is trying to put pressure on CNN, the news network owned by Time Warner.

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