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The FCC basically just approved AT&T and Time Warner’s giant merger

February 27th, 2017 at 5:07 PM

AT&T wants to merge with Time Warner Inc, a move that would create a leviathan new corporation with unprecedented control over both the internet and the content that travels over it.

Traditionally, multi-billion-dollar mergers that change the competitive landscape are subject to major scrutiny. In the past, that scrutiny has come from both the Department of Justice and the FCC, in the case of a telecoms deal. But Trump’s new FCC Chairman, Ajit Pai, has already given the merger his virtual blessing.

As the Wall Street Journal reports, Pai said today that the FCC won’t be reviewing the deal, because by his interpretation, it doesn’t fall into the FCC’s wheelhouse. AT&T has always said that because the deal will involve no transfer of wireless spectrum licenses, the FCC doesn’t need to look at it. Pai seemingly agrees with that view, and therefore the FCC won’t be looking at the deal.

That makes the deal far more likely to be approved. For the FCC to sign off on a deal, the commissioners have to agree that the deal is in the public’s best interest. That’s a far higher bar than approval from the DoJ, which just has to conclude that the merger doesn’t break anti-trust law.

Pai, a former Verizon lobbyist, has a far narrower interpretation of the FCC’s role than outgoing Democratic chair Tom Wheeler. Under Pai, the FCC is rapidly turning away from its role as a regulator of the telecoms industry, and moving towards being a strict administrative body that looks after wireless spectrum. That’s why Wheeler-started investigations into zero-rating data have ended under Pai, and why you can expect to see the AT&T/Time Warner merger move through with no issue.

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