AT&T runs corporate finance into populist uprising

October 25, 2016

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. 

AT&T is running corporate finance smack into a populist uprising. The $85 billion acquisition of Time Warner would consolidate an industry already controlled by a small group of companies. It’s the sort of concentrated power that gave rise to the likes of Donald Trump and Bernie Sanders.

A handful of conglomerates already command most of the U.S. media market. Their influence could grow soon. Tycoon Sumner Redstone wants his Viacom and CBS to merge. An AT&T acquisition of Time Warner would unite the second-largest U.S. telecommunications operator with the owner of HBO, CNN and the Warner Bros. studio. AT&T also recently bought satellite-TV provider DirecTV.

Political opposition has been swift. Trump, who lags in the polls but nevertheless is set to win support from at least four out of 10 American voters, said combining AT&T and Time Warner represents an example of the sort of dominant structures he is fighting. He vowed to block the deal and to try and break up Comcast’s acquisition of NBCUniversal, a transaction completed in the more sedate political climate of 2013.

Sanders, an influential progressive known for hammering Wall Street, said hours after the AT&T deal was unveiled over the weekend that it should be killed. It would mean “higher prices and fewer choices for the American people.” Senators quickly called for an antitrust hearing.

A similar sort of backlash helped derail Comcast’s attempt to buy Time Warner Cable last year. Sanders was among the lawmakers who asked the Justice Department and Federal Communications Commission to block the $45 billion deal. Conservative Republicans also worried about the combined company’s ability to favor left-wing programming.

Sentiments against powerful institutions only have grown during the presidential campaign. Trump beat back 16 other Republicans by positioning himself as an outsider. Likewise, the 75-year-old Sanders marshaled support from younger voters frustrated about entrenched leaders to challenge Hillary Clinton for the Democratic nomination.

AT&T is relying on an army of lobbyists to help it in Washington. Deep pockets don’t go as far as they used to, however, in a highly charged political atmosphere. This effort to intensify corporate power instead may wind up further coalescing the power of the people.

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