AT&T Time Warner merger approved! What does it mean for CRE?

This week, a federal judge ruled that AT&T could move forward with its acquisition of Time Warner without any conditions, reports The Wall Street Journal. The deal, which has been valued at approximately $80 billion had been pending since October 2016.

The deal had been held up due to the Department of Justice’s concerns that the merger would give AT&T the incentive to use Time Warner’s Turner networks as a weapon against DirecTV’s cable and satellite television rivals. The DOJ argued AT&T, which has owned DirecTV since 2015, could threaten to black out Turner and force rivals to pay higher carriage fees for the networks, which would lead to price increases for consumers.

However, U.S District Judge Richard Leon disagreed and stated that AT&T’s rivals could compete even without Turner. Judge Leon also rebuked the DOJ’s other arguments that AT&T would restrict rivals’ use of Time Warner’s HBO and that after the merger, the company might prevent new online rivals from offering video content on the Internet.

“We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government’s lawsuit to block our merger with Time Warner,” AT&T General Counsel David McAtee said in a statement. “We thank the Court for its thorough and timely examination of the evidence, and we compliment our colleagues at the Department of Justice on their dedicated representation of the government.  We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative.”

While the case the government made against this merger was mostly about the potential TV monopoly AT&T would have, for commercial real estate owners and companies, there’s the question of how this deal will impact the industry in terms of in-building wireless. There might be a clearer picture once the deal officially closes sometime before June 20, but for now it appears AT&T could set itself apart from the rest of the wireless industry with this merger.

For example, teamed up with Time Warner, AT&T is now a content provider. Prior to this deal, AT&T, and its wireless counterparts found themselves attracting customers by cutting phone bill prices and buying out their contracts from competitors. Now, AT&T could leverage its connectivity to provide licensed and exclusive content and customized offers to make it a media player that could possibly compete with the likes of Netflix and Amazon, according to D Magazine.

If AT&T were to put more focus providing content, it would have to make sure its wireless services were up to task. That’s good news for building owners who already have or are considering AT&T as their wireless provider. Building owners are looking for every selling point they can to attract tenants to their property and the guaranteed, solid wireless connection AT&T would most likely provide to ensure their streaming services work properly would be a good place to start. Depending on how profitable this deal turns out to be for AT&T, there’s also always the chance commercial real estate owners could end up paying less for their in-building wireless coverage.

“I would’ve been disappointed if they had gone the other way,” Mike Davis senior lecturer at the Cox School of Business at Southern Methodist University in Dallas told D Magazine. “What we need in this industry is a lot of experimentation. Nobody knows the right size of these companies, what businesses they should be in. Technology is changing. We’re about to get improvements in wireless that may displace broadband.”

So what does this all mean for CRE? On one hand, it certainly means ATT will be interested in seeing what the coverage in your building is like for driving new content, adding 5G where there is interest and making sure there is FirstNet coverage. How this will all come about is anyone’s guess.

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