Nov 11, 2016 07:52 AM EST
What Lies Ahead For AT&T-Time Warner After Trump Victory? [Video]
AT&T and Time Warner have some major hurdle to face after Republican Donald Trump won the presidential race.
During the campaign, Candidate Donald Trump openly blasted AT&T for its proposal to acquire Time Warner for a reported $85.4 billion. Trump clearly opposed saying that the merger of the two companies would concentrate too much power that will be held by only a few, USA Today reported.
This pronouncement is a hurdle AT&T and Time Warner must overcome. President-elect Trump distaste of CNN is evident throughout the campaign, which he frequently berated and called biased. CNN is owned by Time Warner. Both AT&T and Time Warner shares dropped 2.3% ($35.57) and 0.3% ($86.33) on Thursday respectively, L.A.Times reported.
AT&T may need a new strategy to find avenues for growth after Trump's win in the elections and his obvious hostility towards further media consolidation. Notwithstanding, there have been reports that several Democrats also opposed the mega-deal.
Evidently, the AT-&T-Time Warner deal became a target for political personalities across party lines, not just Trump. Regulators are urged to put a screeching halt to the deal.
The FCC's 2015 net neutrality rules require all web data to be treated the same. Mobile carriers have been criticized for circumventing net neutrality rules through strategies such as "zero-rating." Zero-rating means users won't exhaust their data allocations when used with certain streaming services. If Trump had his way of neutering net neutrality, AT&T would benefit most if the deal pushes through.
At&T is planning to have its latest acquisition, DirectTV Now streaming service to be zero-rated. As explained above this means users will be able to stream all they want without consuming data allocations. Sounds great? Not so much because AT&T in effect could use zero-rating to unfairly undermine its competitors.
If AT&T and Time Warner merged, the former would still pay the latter a fee to have its content zero-rated, but since AT&T owns Time Warner, the exchange of funds will just be transferred from one division of the mega-corporation to another, not a cent will seep out. This would affect other online content providers since they would have to pay this fee out of their own pockets.