- Speculation about the chances for approval of AT&T's (T +0.7%) $85B deal for Time Warner (TWX +2%) has turned on some key sub-issues, like whether the FCC would get a chance to weigh in, as opposed to merely antitrust reviews.
- Time Warner could sell its license for TV station WPCH in Atlanta, sure; it's Time Warner's FCC licenses for satellite distribution (getting its programs into space and then to people's homes) that could bring in the FCC and thus the biggest threat to the deal.
- Time Warner has dozens of licenses for its dishes that would trigger a review if transferred to AT&T -- and if the company sold its dishes to a third party, that party would still need to get the FCC's OK. AT&T thinks it can "offload" licenses that would trigger a review, says RBC Capital Markets' Jonathan Atkin.
- Meanwhile, the FCC has broad "public interest" authority to end deals that it has a handle on, even by pushing deals to a lengthy hearing (as it did in squelching AT&T's bid for T-Mobile and Comcast (NASDAQ:CMCSA)'s deal for Time Warner Cable).
- But the merger might not face an FCC review under a Trump administration -- "the dawn of a new regulatory day," says analyst Craig Moffett, who now gives the deal a 65% chance of approval. MoffettNathanson upgraded Time Warner to Buy with a price target of $100 (more than 10% upside from today's close).
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