AT&T Lobbying Grows as Justice Dept. Antitrust Suit Looms

AT&T Inc. has poured money into external lobbying in recent months as Democrats question whether the White House meddled in the Justice Department’s review of its $85.4 billion merger with Time Warner Inc., and the company prepares to defend the deal in court.

The telecom giant spent $4.4 million on lobbying in the third quarter of 2017, an increase of $320,000 over the same period last year, according to a Bloomberg Law analysis of disclosures. The company also has 17 internal registered lobbyists.

From April through September, about one-fourth of AT&T’s paid external lobbying work was related to the merger with Time Warner; 17 out of 64 disclosures included specific mentions of AT&T and Time Warner. AT&T also lobbies heavily on net neutrality legislation, availability of broadband wireless spectrum, and patent and trademark reform, according to the filings.

Time Warner has devoted fewer resources to the AT&T deal, according to Bloomberg Law’s analysis.

Two external lobbying firms filed disclosures for work on behalf of Time Warner from April through September, but they lobbied on a wide range of topics, including trade, taxes, online privacy, and cybersecurity. Time Warner has four in-house lobbyists.

Lobbying in the antitrust space can be tricky since regulators’ reviews of mergers or anticompetitive conduct are intended to be independent of outside pressure and based squarely on the facts and law. Lobbyists typically contact key players in Congress that care about a particular competition issue, said Seth Bloom, an antitrust attorney at Bloom Strategic Counsel LLC in Washington and former Democratic general counsel for the Senate Judiciary Committee’s antitrust subcommittee.

“AT&T is particularly an aggressive company when it comes to lobbying,” Bloom told Bloomberg Law.

Bloom worked at the subcommittee during AT&T’s attempted $39 billion merger with T-Mobile Inc. in 2011. That deal fell apart 10 months after the parties announced it. The proposed transaction induced a pitched battle with Obama administration officials and debate on Capitol Hill about whether the combined company would reduce competition in the wireless space.

Spokesmen for both AT&T and the Justice Department declined to comment.

Ramping Up

AT&T now is preparing for the Justice Department to file a lawsuit attempting to block its proposed purchase of Time Warner.

The government is reportedly concerned about the merged company exercising too much control over content, and it has asked Time Warner to sell Turner Broadcasting, or AT&T to spin off DirecTV, to seal their deal. AT&T’s chief executive Randall Stephenson has flatly refused those suggestions. The general view from AT&T lawyers is that there is no reason to ask for such divestitures in a merger that doesn’t involve direct competitors.

Meanwhile, AT&T plans to delve into whether the White House influenced the review if there’s a court battle, according to Bloomberg News. Once a lawsuit is filed, those types of communications would be subject to discovery requests.

Democrats in Congress are concerned about whether the Justice Department is seeking a sale of CNN, which is under the umbrella of Turner Broadcasting, as a favor to President Donald Trump. The president has been outspoken about what he sees as unfair coverage from CNN. He also said on the campaign trail that the AT&T-Time Warner deal should be blocked.

Two House Democrats Nov. 14 requested a hearing to explore Trump’s role in the government’s probe. A group of Democratic senators, led by Sen. Amy Klobuchar (D-Minn.), wrote to Trump last week saying that “political interference in antitrust enforcement is unacceptable.”

Attorney General Jeff Sessions, testifying at a Nov. 14 House Judiciary Committee hearing on DOJ matters, dodged multiple questions regarding communications between the White House and Justice Department about the pending deal. “I’m not able to comment,” he told Rep. David Cicilline (D-R.I.), in response to a query about whether anyone from the White House, including Trump, has contacted the Justice Department.

To contact the reporter on this story: Liz Crampton in Washington at lcrampton@bna.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bna.com