Lawmakers have changed their tune on the AT&T-Time Warner merger

WASHINGTON — When AT&T and Time Warner announced their $85.4 billion deal in October, lawmakers greeted the acquisition frostily. Now their tone has become more encouraging.

At a hearing on Capitol Hill on Wednesday, members of a Senate Judiciary subcommittee that oversees agencies that decide on mergers said the deal merited tough scrutiny.

But in a change from previous comments, they also questioned whether traditional ways of evaluating mergers are growing outdated as companies like Facebook and Google become massive media platforms that threaten the television industry.

“We want to ensure that competition thrives in this critical market and we don’t stifle innovation or deter the emergence of cutting-edge technologies that customers demand,” said Sen. Charles Grassley, R-Iowa, who heads the full Judiciary Committee.

AT&T, a telecom giant, and Time Warner, which owns CNN and HBO, had said in October that AT&T would buy Time Warner to create a mobile video powerhouse. But the hearing may have implications beyond this deal, with the comments potentially encouraging more acquisitions by companies that have been waiting out the Obama administration.

Members of Congress do not review mergers, but the hearings provide guidance for antitrust regulators at the Justice Department and the Federal Communications Commission. AT&T and Time Warner have not officially submitted their deal for regulatory review.

When the deal was announced, days before the presidential election, leaders of the Senate Judiciary Committee issued strong cautionary statements about it. Donald Trump, on the campaign trail at the time, said he would block the merger if elected.

As president, Trump will have no direct power over mergers, but he will influence which ones are approved depending on whom he picks to be the assistant attorney general for antitrust or the chairman of the FCC. AT&T’s CEO, Randall Stephenson, told CNBC before the hearing that he had not had contact with the Trump transition team.

Jeff Bewkes, the CEO of Time Warner, said “it is not enough to deliver great content.” Competitors have multiplied, he said.

Mark Cuban, an internet entrepreneur who spoke at the hearing, said the dominant media distribution companies were Facebook, Google, Apple and Amazon.

Consumer groups rejected the characterization of AT&T and Time Warner as disadvantaged rivals.

“Last time I looked, Google and Facebook weren’t charging me $200 a month to get those apps,” said Gene Kimmelman, president and chief executive of Public Knowledge.

Andrew Harrer / Bloomberg Consumer advocate Gene Kimmelman: “There are too few players in these markets already.”

Andrew Harrer / Bloomberg Internet entrepreneur Mark Cuban: “Facebook is without question in a dominant position.”

Evan Vucci / Associated Press Time Warner’s Jeff Bewkes: “It is not enough to deliver great content.”

Andrew Harrer / Bloomberg AT&T’s Randall Stephenson: “We will bring the consumers better price options.”