The Department of Justice’s shift may reflect concern about the scale of the new entity. In recent years, a growing chorus of critics on both the left and the right have pushed for tighter antitrust enforcement, arguing that scale itself can be problematic. In a series of speeches and public statements, Makan Delrahim, the department’s antitrust chief, has laid out a more aggressive posture on some antitrust questions than those who have held his role in recent GOP administrations. Alternatively, it could reflect regret within the department over the Comcast decision, based on its subsequent results. Or it could show a preference for structural remedies, like divestment, over behavioral ones, which require ongoing government oversight.
But hovering over the case is something else: Trump’s hatred of CNN.
According to The New York Times, which has tracked Trump’s insults since he declared his candidacy, Trump has insulted CNN, its properties, and its panelists nearly 150 times. He’s called it “Fake News!,” or the “Clinton News Network,” and said CNN is “boring,” “failing,” and “ratings starved.”
The DOJ’s decision to sue AT&T may have nothing to do with Trump’s influence, but the department, AT&T, and the public all have a firm understanding of where the president stands. So when Trump’s personal lawyer Rudy Giuliani recently said, “The president denied the merger,” before backtracking, it renewed questions as to whether his personal animus was behind the government’s intervention.
But, curiously, AT&T is not litigating the suit on the grounds of selective enforcement, a claim that the government is unfairly targeting a private company for political purposes. That argument was essentially eliminated when Leon blocked AT&T’s request for request for records of communications between the White House, the attorney general, and the Justice Department’s antitrust division in February.
AT&T is instead fighting an old-fashioned antitrust suit on old-fashioned antitrust grounds. The president, though relevant, is not front-and-center in this court case.
Trump’s battle to destroy CNN, his ratings symbiote, will be decided on U.S. antitrust law.
Stephenson says AT&T needs greater scale to compete. He might be right.
Tech companies, notably those that comprise FAANG, have made massive investments in (often high-quality) TV programming, have built sophisticated distribution platforms with enormous user bases, and possess much deeper pockets than the TV incumbents.
Moreover, Wall Street judges the stars of Silicon Valley on much looser valuation standards than media or telecommunications companies. Netflix actually loses money, and had accumulated around $20 billion in debt as of last July. Nevertheless, Netflix’s stock surpassed Disney’s last week for the first time, making it the most valuable media company in the world.