Rieder: Big battle ahead over big merger

It's a big deal that arrives squarely in the midst of a presidential campaign that gave us the word "bigly."

Start with the price tag: AT&T would pay a cool $85.4 billion to acquire Time Warner. That's real money.

Then think about the scope: It would put together a big time content distributor with a content producer whose wide array of holdings include HBO, CNN, Warner Bros., TNT, TBS, the Cartoon Network, Bleacher Report and DC Comics. That's a lot of prime content.

And the sheer size of the undertaking guarantees in the current climate some very intense scrutiny by the federal government.

Time Warner stock falls. Focus on regulatory hurdles of AT&T deal.

AT&T and Time Warner argue that there aren't really any serious regulatory issues to worry about because the companies don't compete. They are in different businesses. Time Warner makes stuff, AT&T transmits stuff. It's what the suits call vertical integration. And all of that is true.

But consumer advocates worry that the deal would simply give too much control over too much content to a single entity.There's concern, for example, that the merged company could take advantage of its clout by charging distribution rivals higher prices for its desirable wares. The outcry against the merger was immediate and loud.

"Allowing a communications behemoth like AT&T to swallow the Time Warner media empire should be unthinkable," said former FCC commissioner Michael Copps, now a special adviser to Common Cause. "The sorry history of mega mergers shows they run roughshod over the public interest. Further entrenching monopoly harms innovation and drives up prices for consumers"

The deal comes at a time when big business is not exactly a popular player on the hustings. Republican presidential candidate Donald Trump has railed against a system he depicts as rigged in favor of corporate elites at the expense of the working class. Socialist Bernie Sanders' vigorous challenge in the Democratic presidential primary has pushed Hillary Clinton, she of the fabulously compensated Goldman Sachs speeches, well to the left on business issues.

AT&T agrees to buy Time Warner for $85.4 billion

Trump moved quickly to emphasize that his administration, should there be one, would not greenlight the deal because, he said Saturday on the campaign trail, it would result in "too much concentration of power in the hands of too few." Clinton running mate Tim Kaine suggested a Clinton administration would give the transaction a very close look. “I share the concerns and questions,” he said Sunday on NBC's Meet the Press. “We have to get to the bottom of them.”

Big mergers are the purview of the Justice Department, which no doubt would take a very close look no matter who prevails on Nov. 8. The FCC would not necessarily investigate the transaction.

On Capitol Hill, the leadership of the Senate Judiciary Committee telegraphed that the panel also would be dissecting the deal and its ramifications.

So this high-profile merger is by no means a done deal.

When it comes to mergers this is hardly the first rodeo for either of the players.

Time Warner, in fact, was a participant in one of the all-time merger horror shows, its doomed 2000 marriage to AOL. That deal, too, linked a content maker and a distribution partner. But as Kara Swisher, who wrote a book about that merger, points out on Recode, that deal was done in by the utter incompatibility of the cultures of the two companies. In particular, Swisher writes, the Time Warner side had little respect for its new partners. AOL was spun off in 2009.

AT&T-Time Warner deal could spur more mergers, scrutiny

Certainly a cautionary tale should the AT&T/Time Warner mashup become a reality. If the companies don't really merge, all the lofty rhetoric in the world won't count for much, no matter how sound the idea behind it.

As for AT&T, it made a big splash last year when it acquired satellite-based TV service DirecTV, which made the phone company the nation's largest pay-TV distributor.

AT&T buys DirecTV for $48.5 billion

But in 2011, the company dropped its bid to acquire T-Mobile in the face of vigorous opposition from the Obama administration. That transaction would have made AT&T the country's biggest cellphone service provider. This, of course, was a case of horizontal integration, in which AT&T would have been swallowing up a competitor.

Should the deal go through, AT&T would find itself owning a major news outlet in CNN. Despite its excesses, CNN remains a vital journalistic institution. What would phone company ownership mean for the 24-hour news operation? The would-be new owner is making all the right noises.

"I think of a brand like CNN and the key variable of your brand is your independence, and when people watch CNN, are they getting an independent assessment and reporting of the news," said Randall Stephenson, AT&T chairman and CEO, Monday on CNN's New Day. "The last thing we want to do, as AT&T, is in any way taint that in the slightest bit."

Follow USA TODAY columnist Rem Rieder on Twitter @remrieder

.