DOJ Antitrust Chief Confirmation a Question Mark for AT&T/TW Review

Whether Wednesday's Senate confirmation of DOJ Antitrust Division Chief Makan Delrahim (see 1709270058) will affect the department's review of AT&T/Time Warner isn't clear, with some seeing it likely speeding up resolution and others saying the agency demonstrably hasn't been waiting for a permanent head. AT&T told us it still expects the deal to close by year's end.

Unconfirmed new chiefs are typically already deeply involved in what the division is doing, with the lower political appointees already in place often being that chief's people and the acting assistant attorney general customarily being someone favorable to the nominee, said Chris Sagers, Cleveland State University law professor. It's unlikely the division was deliberately dragging its feet to wait for Delrahim or to avoid taking any action that could jeopardize his confirmation.

The division's acting assistant attorney general, Andrew Finch, was -- like Delrahim -- a relatively conventional Republican antitrust lawyer, so Delrahim's arrival shouldn't mean substantive change, said antitrust lawyer Kelsey Shannon of Lynn Law Firm, previously was with the division. Shannon said the review of the $109 billion deal announced in October (see 1610220002) has been long "but not ... excessively long," so there's no reason to think the division was awaiting Delrahim or a DOJ announcement on the deal would come within just a few days. Antitrust experts said Delrahim likely would espouse a light regulatory touch on deal approvals (see 1703280020).

The division's lawsuit earlier this week, before Delrahim's confirmation, to stop Parker-Hannifin's acquisition of Clarcor -- and saying it would require asset divestitures for Showa Denko KK's takeover of SGL Carbon -- points to the agency not waiting for a permanent head of antitrust to be confirmed as it reviews deals, an informed person and agency expert said. Delrahim potentially could come in with different priorities, requiring a different look at AT&T/TW than what the staff has been doing, but it's more likely he would focus on staff recommendations in the deal review, the person said.

The confirmation "will certainly speed up decision making in the antitrust division and provide staff with reliable policy direction," said Travis LeBlanc of Boies Schiller, who until earlier this year was FCC Enforcement Bureau chief. Delrahim will review the division staff's recommendation -- and also ensure all various stakeholders in the deal, including competing distributors and content companies, states and consumers, had their interests considered -- but "it ultimately will be up to him," LeBlanc said.

Experts said AT&T/TW approval seems likely, though perhaps with some conduct conditions or small divestitures, given Delrahim's antitrust approach. Sagers said enforcement actions aren't likely "except against slam dunk violations." A Hillary Clinton or Bernie Sanders administration might have looked at broader conduct remedies but also would have been unlikely to sue to stop the deal, Sagers said. DOJ didn't comment.

The general view is Justice was waiting for Delrahim, preferring that decisions on major transactions come from confirmed leaders instead of interim staff, said a lawyer with cable and transaction experience. AT&T surely welcomed the confirmation news since that clears a path toward resolution, the lawyer said. Knowing the DOJ outcome or what conditions to expect is tough without a parallel FCC proceeding giving insight into the meetings being held and issues being discussed, the lawyer said.

The division will have to bring Delrahim up to speed and make sure he agrees with the conclusion of its analysis, but it's not expected the division will have to restart the review process or change direction, said a lawyer with cable and content clients.

Delrahim's confirmation was met with Twitter kudos from FCC Chairman Ajit Pai. Commissioner Mike O'Rielly tweeted Delrahim was "a quality individual who will do well in new role." FTC acting Chairwoman Maureen Ohlhausen tweeted she "look[ed] forward to working together on strong #antitrust agenda."