Politics Or Policy? Behind The Dispute Over At&T-Time Warner

Politics Or Policy? Behind The Dispute Over At&T-Time Warner

AT&T is vowing to fight the U.S. government to save its $85 billion bid for Time Warner, after the Justice Department sued to block the deal on grounds it could hike television bills and hamper innovation.

The government’s objections have raised red flags for those who worry that the White House is using the merger-review process to try to hurt Time Warner-owned CNN, with which President Donald Trump has tangled frequently.

Here’s a look at what’s behind the deal:

WHY DOES AT&T WANT TO BUY TIME WARNER?

As U.S. wireless growth slows down, AT&T has been looking for ways to marry its nationwide wireless business with video, which Americans increasingly watch on the internet.

AT&T bought satellite TV company DirecTV in 2015. Buying Time Warner would give AT&T more video through such cable networks as HBO, CNN and TBS and the Warner Bros. movie studio. AT&T can deliver this video over the internet, including its cellular network.

AT&T also hopes to use Time Warner content to support an advertising business that could stand up to Google and Facebook, which dominate the digital-ad industry and are increasingly interested in video themselves. AT&T also could use Time Warner’s video to support its wireless business. AT&T already discounts its streaming service, DirecTV Now, and even HBO, which it doesn’t own yet, to lure customers to its unlimited phone data plans.