Any DOJ condition of sale of some Time Warner channels in AT&T buying TW would be "unprecedented" for a vertical merger, wrote Free State Foundation President Randolph May and Fellow Theodore Bolema in an opinion piece in The Hill Friday. "It will have a challenge in court explaining why this case deviates from antitrust enforcement precedent in which, at most, behavioral conditions were sufficient." BTIG analyst Rich Greenfield said it's "nearly impossible" to imagine Comcast getting regulatory OK for significant content or distribution acquisitions under this administration, and if DOJ sues to block AT&T/TW or forces a divestiture of Turner or DirecTV, "it is not far-fetched" to think an attempted government breakup of Comcast/NBCUniversal could come. He pooh-poohed Comcast/NBCUniversal buying Fox but envisioned a Comcast split if vertical integration is a legal issue, with the result being two public companies: Comcast and Sky holdings on one side, NBCU and Fox on the other. Event Driven reported DOJ antitrust chief Makan Delrahim (see 1711160056) said he's “absolutely” confident in his team if AT&T/TW is litigated and the agency will decide how to proceed "in due course." AT&T hired a lawyer to help in that potential effort (see the personals section of this issue of this publication.)

What role politics is playing in the Trump administration's review of AT&T's buying Time Warner (see 1711140049) and other pending media transactions should be the focus of a House Judiciary Committee hearing, ranking member John Conyers, D-Mich., and Rep. David Cicilline, D-R.I., wrote Tuesday to Chairman Bob Goodlatte, R-Va. The letter referred to Trump's "troubling pattern of potential political interference" in telecom and media competition and other antitrust enforcement matters. Goodlatte's office didn't comment.

Broadcast duopolies don’t result in higher-quality programming based on viewership numbers, said Dish Network in a partially redacted FCC ex parte filing posted Monday in docket 14-50. “The claim by some broadcasters that duopoly ownership results in higher quality programming, reflected by higher viewership, should be borne out by comparably higher levels of viewership across both stations included in their duopoly ownership.” Economists hired by Dish found duopolies don’t lead to higher viewership, the company said. “Viewership per household per month has been less in the duopoly markets than in the comparable non-duopoly markets over the period.”

Broadcom remains “fully committed” to buying Qualcomm for $70 a share, said Broadcom in a Monday statement, after Qualcomm’s announcement earlier in the day that its board unanimously rejected the Nov. 6 “unsolicited” offer (see 1711060004). Broadcom is “encouraged” with the reaction of Qualcomm shareholders that the offer is “the most attractive, value-enhancing alternative available” to them, said CEO Hock Tan. Many Qualcomm shareholders “have expressed to us their desire that Qualcomm meet with us to discuss our proposal,” said Tan. It remains Broadcom’s “strong preference to engage cooperatively” with Qualcomm's board and management team, he said. It’s Qualcomm board’s “unanimous belief” that Broadcom’s offer “significantly undervalues Qualcomm” relative to its “leadership position in mobile technology and our future growth prospects,” said Chairman Paul Jacobs. No company is “better positioned” in mobile, IoT, automotive, edge computing and "networking within the semiconductor industry,” added CEO Steve Mollenkopf. “We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G.”

House Commerce Committee ranking member Frank Pallone, D-N.J., and House Oversight Committee ranking member Elijah Cummings, D-Md., jointly called Monday for FCC Inspector General David Hunt to launch an investigation into the commission’s recent actions on media policy issues that the congressmen believe “improperly benefit” Sinclair and its proposed purchase of Tribune. Pallone and other congressional Democrats have repeatedly criticized the majority-Republican FCC and Chairman Ajit Pai for their actions to revamp media rules, including April restoration of the UHF discount (see 1707250059, 1708140058, 1709280056, 1710250050 and 1711070029). Commissioners are expected to vote Thursday on a draft order on media ownership reconsideration and authorization of ATSC 3.0 (see 1710250049 and 1711100003). Pai’s failure to “adequately respond” to Democrats’ inquiries on the FCC’s Sinclair-related actions, including requests for all correspondence between Pai’s office and Sinclair, “only increase our concerns,” Pallone and Cummings said in a letter to Hunt. Pai told Pallone and other top House Commerce Democrats in September the FCC didn’t give Sinclair/Tribune special treatment (see 1709190060). Pallone and Cummings said several media rules actions raise “serious concerns” about whether Pai is complying “with the FCC’s mandate to be independent,” including the pending November vote on media ownership reconsideration, the October vote to eliminate the main studio rule (see 1710240062) and July approval of Sinclair’s $240 million buy of TV stations from Bonten Media (see 1707050042). The IG’s investigation should examine whether FCC actions under Pai “show a pattern and practice of preferential treatment for Sinclair,” and whether interactions between Pai’s office, President Donald Trump’s administration and Sinclair “demonstrate inappropriate coordination,” Pallone and Cummings said. The investigation request “appears to be part of many Democrats’ attempt to target one particular company because of its perceived political views” given a 2004 bid by Pallone, House Communications Subcommittee ranking member Mike Doyle, D-Pa., and others demanding an FCC investigation ahead of Sinclair’s potential airing that year of the Stolen Honor documentary that criticized then-Democratic presidential nominee John Kerry’s Vietnam war record (see report in the Oct. 14, 2004, issue), a spokeswoman said. She said Pai is “sticking to his long-held views” on the need to revamp media ownership rules, and “given the strong case for modernizing these rules, it's not surprising that that those who disagree with him would prefer to do whatever they can to distract from the merits of his proposals.” Sinclair didn't comment.

DOJ antitrust chief Makan Delrahim and President Donald Trump deny White House involvement in the agency's review of AT&T's planned buy of Time Warner. Delrahim in a statement Wednesday said he has "never been instructed by the White House on this or any other transaction under review by the antitrust division." An White House in an accompanying statement said, "The President did not speak with the Attorney General about this matter, and no White House official was authorized to speak with the Department of Justice on this matter.” Justice was reportedly pushing for a divestiture of Turner Networks or of DirecTV as a condition of approving AT&T/TW (see 1711080047). Commissioner Jessica Rosenworcel tweeted Wednesday that if the DOJ is using antitrust law to force a sale of Turner's CNN because of opinions of its coverage, "You can dislike consolidation but still find this extremely disturbing if true." Sen. Al Franken, D-Minn., said the deal shouldn't go forward because of media consolidation worries, but signs the Trump administration is trying to attack media organizations it doesn't like would be "profoundly disturbing." Other Senate Democrats also raised new questions about the DOJ's independence from Trump given the AT&T/TW review demands, including House Communications Subcommittee ranking member Brian Schatz, D-Hawaii. “Any suggestion that the deal be conditioned on selling off a news channel because of its coverage is offensive to both the First Amendment and the rule of law,” said Sen. Ed Markey, D-Mass., in a statement. Dish Network's CEO voiced concerns Thursday about AT&T/TW (see 1711090004). DOJ, meanwhile, said “there is no legal obligation” for Antitrust Division head Makan Delrahim to recuse himself from involvement in the department's review of AT&T/TW based on earlier comments he made that the proposed merge doesn't pose a “major antitrust problem,” said Assistant Attorney General-Legislative Affairs Stephen Boyd in a letter to Sen. Elizabeth Warren, D-Mass. Warren sought Delrahim's recusal over the comments, which she said could “undermine public confidence in the Division's ability to reach an unbiased final decision” on AT&T/TW. The full version of Delrahim's comments show he “indicated the proposed merger should and would get a full and complete review” by Antitrust, “that the review would be based on the law and the facts,'” Boyd said. “We can assure you that [Antitrust's] merger enforcement will be based on application of the law to the particular facts and circumstances presented by any proposed merger.”

Sprint CEO Marcelo Claure made clear Wednesday that a potential transaction with T-Mobile fell apart (see 1711060068) because Masayoshi Son, CEO of Sprint parent SoftBank, didn’t want to give up control of the combined company. Son saw the deal as essentially “a merger of equals,” Claure said at Wells Fargo conference. “It came down to Masa wasn’t prepared to relinquish control of Sprint.” SoftBank wanted to maintain control of a player in the “largest market,” he said. Executives with T-Mobile parent Deutsche Telekom pushed for the deal but were unable to convince Son, Claure said. Claure said he was able to convince the SoftBank board, on which he serves, that Sprint has a “bright future” and would continue to grow its customer base. “We’ve proven that we have the ability to add customers,” he said. “We’ve proven that we can take costs out.” The talks weren't a waste, he said: “It was a fascinating experience, for the first time getting to know and meet the T-Mobile management team.” Claure views the Altice mobile virtual network operator deal as a test case for further wireless/cable integration. “It’s very different than a traditional MVNO,” he said. “We have full access to Altice’s backhaul, we have full access to cable infrastructure.” The deal will help Sprint expand in markets like New York, he said. “We’ve said it very publicly, we believe eventually there is going to need to be a tie-up between a telco and cable,” he said. Claure said Sprint will “dramatically increase” its capital expenditures next year to the $5 billion-$6 billion range. “We’re going to spend more if possible,” he said. Sprint wants to “accelerate” its network buildout and recognizes it needs to install more macro cell towers, he said. the carrier plans to put its 800 MHz, 1.9 and 2.5 GHz spectrum on all of its towers, many of which today only carry 2.5 GHz spectrum, he said. “I want to make sure that we fix the foundation.” T-Mobile didn't comment.

The U.K. Competition and Markets Authority shouldn't assume Sky News will continue to be provided if Fox's planned buy of Sky doesn't go through, Sky said Tuesday in a CMA filing. It said it would "likely be prompted to review the position" if the provision of Sky News unduly impedes the Fox deal or other such deals. In a separate CMA filing Tuesday, Fox said there isn't one editorial position shared by News Corp. newspapers with which Sky News content "could even theoretically be aligned." It said overlap of exclusively Sky News and News Corp. news consumers is small, so the deal doesn't hurt diversity. And it said Ofcom considers Fox's compliance with UK broadcasting standards good, and thus "there is no plausible, let alone likely, risk" Fox wouldn't maintain Sky's commitment to broadcasting standards. U.K. Secretary of State for Culture, Media and Sport Karen Bradley in September referred Fox/Sky to CMA for a full, six-month investigation (see 1709140020). CMA said provisional findings are due in December.

Time Warner stock closed down 6.5 percent to $88.50 Wednesday after reports (here and here) DOJ was pushing for divestiture of Turner Networks or of DirecTV as conditions on AT&T's proposed $108.7 billion buy of the programmer. AT&T Chief Financial Officer John Stephens told investors it's in active discussions with Justice, but "timing of the closing of the deal is now uncertain." Separately in a statement, CEO Randall Stephenson said that throughout DOJ's review of the deal, "I have never offered to sell CNN and have no intention of doing so.” Turner's assets include CNN. AT&T had expected to close on TW by year's end (see 1711020051). Free Press said it continues to oppose AT&T/TW on media consolidation grounds, and forcing divestiture of content properties such as Turner distribution properties or DirecTV could soften those consolidation harms, but department opposition is problematic if it's based on President Donald Trump's antipathy to CNN coverage: "Everyone should agree that the government shouldn’t base antitrust decisions or FCC rulings on whether it likes a newsroom’s coverage." As a candidate for president, Trump said he opposed AT&T/TW (see 1610220002). If Justice has a problem with a vertical merger like AT&T/TW, the possibility of horizontal mergers in the sector seems "substantially lower" than previously thought, meaning a Disney move for Fox wouldn't pass muster, let alone Comcast buying Charter or any further content assets, BTIG analyst Rich Greenfield emailed investors Wednesday. He raised the specter of Comcast having to sell its NBC or Hulu ownership after the Comcast/NBCUniversal consent decree ends, saying if AT&T/TW is problematic for DOJ, "how is the former okay?" DOJ in a statement said it's "committed to carrying out its duties in accordance with the laws and the facts." Wells Fargo analyst Marci Ryvicker, in an email to investors, said there are no potential buyers for DirecTV, but CNN could command $8 billion to $10 billion and be a strategic fit with CBS. She also said while there's now "a really uncertain spell on M&A in general," Discovery/Scripps Network and Sinclair/Tribune are likely not at risk.

Disney's rumored interest in buying part of Fox (see 1711060062) raises questions, BTIG's Rich Greenfield emailed investors Tuesday. He said news of Disney interest could lead to Fox finding out if other players, such as Verizon or Comcast, might also be interested. The analyst said word that Fox might sell its share of Sky could point to it being convinced regulators won't let the remainder of Fox's buyout of the rest of Sky go through. The UK Competition and Markets Authority is reviewing that deal (see 1710100029). Greenfield said Disney's wanting to increase its exposure to sports-centric overseas cable networks makes little sense. Greenfield said Fox TV Studios could help create content for Disney's over-the-top offering, but most Fox TV content heads would stay with the Fox TV network that would stay with Fox, and HBO's deal for Fox film studio content doesn't expire until the end of 2022. He said Disney/Fox could hit regulatory problems from dominance of film studios and opposition from theater owners and film industry guilds. Wells Fargo analyst Marci Ryvicker emailed investors that Fox could go for $41 per share, or $47 if all of Sky were included. She said Fox's cable networks could be worth up to $75 billion, the film business could be valued at $13 billion and the TV business $7 billion. Ryvicker said Fox has attractive assets and Disney "an exceptionally strong" balance sheet.