AT&T

The U.S. Justice Department on Wednesday took the extraordinary step of suing AT&T, alleging that its DirecTV unit orchestrated an illegal campaign to block wide carriage of SportsNet LA,  the regional sports channel owned by the Los Angeles Dodgers.

AT&T’s practice of exempting its streaming video services from data usage caps is rankling competitors and shaping up as a big issue for regulators weighing the company’s proposed $85.4 billion acquisition of Time Warner.

Time Warner has hired Christine Varney, a partner at Cravath, Swaine & Moore, to make the case to the government that AT&T’s acquisition of Time Warner would not kill competition. Varney is one of the nation’s top antitrust lawyers working for corporate America. But six years ago, Varney was the government’s head antitrust cop, leading the Obama administration’s effort to crack down on deals that could result in higher prices.

Tim Cook is the apple of Goldman Sachs’ eye. Goldman is trying to persuade Apple to make a rival bid for Time Warner, a source with direct knowledge of the situation said. “They are freaking out trying to convince Apple to come in,” the source said. Goldman has been left on the sidelines in advising on AT&T’s $85 billion agreement to acquire Time Warner.

AT&T’s proposed $85.4 billion acquisition of Time Warner is one of the biggest media mergers in years. Randall Stephenson, CEO of AT&T, and Jeff Bewkes, chairman-CEO of Time Warner, make the case for why the combination is good for consumers and should be cleared by regulators.

Other then diverting money that might have gone to buying TV spectrum, the proposed AT&T merger should not have much impact on broadcasting. Of more concern is AT&T’s announcement on Tuesday that its DirecTV will offer a not-so-skinny bundle of more than 100 channels for $35 a month. That’s the challenge for broadcasters. They have to make sure they’re included in DirectTV Now at a fair price.

The Senate Judiciary Committee announced a Dec. 7 hearing on the proposed merger of AT&T with Time Warner. The hearing before the antitrust subcommittee is to include the CEOs of both companies — Randall Stephenson of AT&T and Jeff Bewkes of Time Warner.

Hillary Clinton says she will “closely” follow AT&T’s acquisition of Time Warner as the deal comes under regulatory scrutiny in Washington.

DirecTV Now, AT&T’s virtual pay TV package, was billed by executives as a cure for cord-cutting and an enticement for the cord-never crowd. Analysts initially estimated DirecTV Now would cost anywhere from $50 to $70 when it hit the market. On Monday, AT&T CEO Randall Stephenson, while on the stump for his proposed $85 billion acquisition of Time Warner, announced DirecTV Now’s package of Internet-delivered streaming channels will be offered for just $35 a month when it launches in November. What happened?

Under longstanding antitrust policy, the AT&T-Time Warner deal should be practically a shoo-in. But these are not usual times.

As a multimillion-dollar donor to lawmakers, with a huge roster of lobbyists, the communications giant is ready to pursue its $85 billion bid for Time Warner.

If regulators approve AT&T’s $85.4 billion acquisition of Time Warner, the combined company would be far bigger than Disney and boast top-tier assets such as DirecTV, HBO and Warner Bros. That has spurred some industry observers to speculate on whether Disney might need to pursue a significant acquisition of its own in order to continue thriving in a rapidly changing media business.

Commenting on the proposed $85.4 billion takeover of his company by AT&T, Time Warner CEO Jeff Bewkes discussed the ability of the combined company to create innovative over-the-top products like the upcoming DirecTV Now. But in the process, Bewkes — who originally spearheaded the pay-TV industry’s TV Everywhere initiative back in 2009 — offered a tacit admission that the complexity of programming deals had fatally undermined traditional pay-TV’s plan to distribute content to mobile devices.

AT&T’s DirecTV Now will offer 100 channels for $35 a month, including unlimited mobile data for viewing. The announcement of the service, whose price is lower than the industry norm, came via AT&T CEO Randall Stephenson at the WSJ Digital conference Tuesday. It will hit the market in November.

A look at where the AT&T deal leaves other prominent media companies and what some think they might attempt to do in response.

AT&T’s proposed $85 billion takeover of Time Warner will, in part, help the combined companies push video distribution innovation that may have been slowed by cable companies. During a call this morning to discuss the merger, Time Warner CEO Jeff Bewkes said various cable companies and other distributors “took a long time” to create direct-to-consumer VOD offerings across all networks because negotiations between various pay TV providers and network groups held up the process.”

The acquisition would combine a telecom giant that owns a leading cellphone business, DirecTV and internet service with the company behind some of the world’s most popular entertainment, including “Game of Thrones,” the “Harry Potter” franchise and professional basketball. It’s the latest big media acquisition by a major cable or phone company — deals like Comcast’s 2011 purchase of NBC Universal, all aimed at shoring up businesses upended by the internet.

At a speech in Gettysburg, Pa., outlining what his priorities would be if elected president, the Republican nominee warned that the anticipated merger of the two media giants would give the surviving AT&T “too much concentration of power. …We’ll look at breaking this deal up.”

AT&T has reached an agreement in principle to buy Time Warner for about $85 billion, sources said on Friday, paving the way for what would be the biggest deal in the world this year, giving the telecom company control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets.

Time Warner shares soared more than 12% in trading Friday amid reports that the entertainment giant is in advanced talks to merge with AT&T. Time Warner shares spiked so fast that trading was briefly halted just before 11 a.m. ET for about 10 minutes. Time Warner surpassed its 52-week high and was hovering around $93 at noon ET. AT&T shares have dropped on the news, falling about 3% to around $37 in trading Friday.

Senior executives at AT&T and Time Warner have met in recent weeks to discuss various business strategies including a possible merger, according to people familiar with the matter. Time Warner rose at much as 9.5% in New York to $86.75, valuing the company at about $67.5 billion. AT&T fell 2%.

AT&T has gone from a regional phone company to a national telecommunications powerhouse over the past decade. Its next big expansion will see it buying businesses to transform into a media and entertainment giant, according to people familiar with the plans.

Is AT&T trying to transform into a media and advertising company? Executives in the industry say there has been extensive chatter on the topic all year, with some going so far as to say the telecom giant might make a move sooner than later. AT&T is mum about its plans, and declined to comment. But strategically, analysts say it makes sense, and — with cash and cash equivalents of $7.2 billion according to its 2Q earnings — such a decision is well within their capability.

The FCC lacks authority for its new plan to enable consumers to stop renting set-top boxes, cable providers and other opponents say. Opponents to the plan, including Comcast, AT&T and the Motion Picture Association of America, are now arguing that the licensing scheme proposed by the commission is illegal.

AT&T and Discovery Communications have announced a multi-year carriage extension that will keep Discovery’s linear channels on AT&T U-verse and the DirecTV satellite TV platform, expand TV Everywhere rights, and offer digital rights for the upcoming DirecTV Now live-streaming service.

A new plan from AT&T on how best to repack television stations on a regional basis following completion of the incentive auction has received kudos from parts of the TV industry knowledgeable about what will be required. However, there appears to be a few missing pieces, the most glaring of which is the lack of leadership to shepherd the TV broadcasters, tower crews, vendors and others through the process. Read the first part of this Special Report here.

AT&T has selected Omnicom Group for ad and media duties on its massive $3 billion ad account, the companies confirmed Friday. In addition to creative and media, the scope of work includes digital, data and analytics.

Howard Symons of the FCC’s Incentive Auction Task Force says that work is proceeding apace on a computer program that will calculate when stations have to move to their new channels in the TV band repacking that will follow the incentive auction. He promises ample opportunities for broadcasters and other stakeholders to vet the program this summer and suggest changes. What is unlikely to change, however, is the time for completing the entire repack. “At this point, we see no reason that 39 months won’t work.”

Fullscreen, owned by Peter Chernin and AT&T, will offer 800 hours of ad-free programming and allow users to interact with one another in real time for $5 a month.

The bickering in Washington over how long TV broadcasters should have to move to new channels after the incentive auction has not been productive. It’s time for the FCC to listen to AT&T and NAB, dump the current 39-month deadline and adopt a regional phase-in approach. It makes the most sense for wireless carriers as well as for broadcasters and their viewers. For once, let reason prevail.

The service on Thursday admitted that for the last five years it has been capping the speed of its video streams on the AT&T and Verizon cell networks to keep customers from going over their monthly data allowance. By doing so, Netflix keeps viewers from paying stiff penalties, keeping the binge-watching behavior Netflix relies on in check.

Like AT&T, the broadcast group says the most logical way to conduct the post-auction repacking of the TV band later this year is on a regional basis with the most populated regions going first. “Prioritizing the most highly populated markets will…minimize viewer disruption and confusion.”

Univision Communications and AT&T agreed Friday evening to extend the access of the Univision network and stations until 1 a.m. ET on Wednesday, March 16. Univision’s other networks will continue to be unavailable. The two companies said they will continue to work to reach agreement on a new contract.

Univision and AT&T agreed late Thursday to extend the access of the Univision network and stations brought back for Wednesday night’s political debate until 1 a.m. ET Saturday. Univision’s other networks will continue to be unavailable. The two companies will continue to work to reach agreement on a new retransmission consent contract.

AT&T and Univision Communications’ efforts to make each other look like the culprit in a blackout of the Spanish-language broadcaster on U-verse led to some confusion over whether it will remain available for 24 hours after Wednesday’s Democratic presidential debate.

Wednesday afternoon, Univision requested that AT&T continue to distribute its signal to AT&T’s U-Verse subscribers for 24 hours immediately following the conclusion of Wednesday night’s Washington Post-Univision Democratic Presidential Debate. Univision said it “is hopeful that AT&T will show good faith in the parties’ ongoing [retransmission consent] negotiations by treating Univision’s top-rated Hispanic content on par with its English-language broadcasting counterparts in order for the companies to continue to collaborate in serving the growing U.S. Hispanic community.”

Univision has agreed to temporarily lift its blackout of AT&T U-verse so that the service’s Spanish-language viewers would have access to Wednesday night’s Democratic presidential debate.

AT&T is marketing DirecTV to customers upset that Univision has been blacked out on its U-Verse service, showing the telecom giant’s newfound negotiating leverage.