But three people briefed on the situation had conflicting accounts of the specifics. One of the people said Wednesday that the Justice Department, at a meeting in Washington this week, pressed AT&T to divest CNN, which has been criticized repeatedly by President Trump. But the other two denied that happened, adding that it was in fact AT&T that had proposed the sale of the news network as a potential compromise. The three people spoke on the condition of anonymity to freely discuss the private discussions.
Conflicting news reports about the role of CNN in the talks prompted AT&T chief executive Randall Stephenson to release a statement Wednesday afternoon, saying he has “never offered to sell CNN and have no intention of doing so.”
Antitrust regulators have been examining the AT&T -Time Warner deal for more than a year, and any notion that it would be easily approved evaporated Wednesday as reports about the Monday meeting leaked out.
Earlier Wednesday, AT&T’s chief financial officer said he is no longer confident that a deal will be completed this year.
The proposed tie-up is part of a push by cable and telephone companies to own the content that flows through their pipes. In 2011, Comcast, the nation’s largest cable provider, became the first to swing a massive deal of this kind when it acquired NBC Universal.
AT&T’s tie-up with Time Warner would give the telecom giant large control over a massive media ecosystem. The combined company could own HBO television shows, superhero films set in the DC Comics universe, including the forthcoming “Justice League,” and the Harry Potter franchise. It would also have a distribution network that includes AT&T’s wireless network, home Internet platform and DirecTV, which it purchased in 2015.
Some antitrust analysts said that DOJ’s moves send a message that the federal government is looking skeptically at such megamergers.
“We may be on a collision course to litigation unless something changes,” said Gene Kimmelman, a former antitrust official and the president of Public Knowledge, a consumer group.
The case would be a high-profile test for Makan Delrahim, who was appointed by Trump to head the Justice Department’s antitrust division. Delrahim is regarded in Washington as a politically savvy antitrust expert, and was a vocal supporter of Trump’s in 2016.
The legal battle would also be unusual because antitrust officials rarely challenge companies that are not buying direct competitors.
AT&T could argue in court that the administration is blocking the deal for political reasons. Trump frequently accused CNN of biased coverage during the campaign and his presidency.
“A judge is likely to be a great deal more skeptical of DOJ’s arguments because of Trump’s obvious agenda,” said Berin Szoka, president of TechFreedom, a libertarian think-tank. That might make it more likely that AT&T would refuse to settle, he added.
“The really interesting question is whether AT&T might convince the court to force DOJ to turn over internal correspondence with the White House over the issue, which might reveal clear evidence of politicization of the process,” Szoka said.
In twin statements late Wednesday, the White House and DOJ denied that Trump has sought to influence the review process.
"I have never been instructed by the White House on this or any other transaction under review by the antitrust division," said Delrahim.
The White House's principal deputy press secretary, Raj Shah, said that Trump has not spoken with Attorney General Jeff Sessions about the proposed acquisition, "and no White House official was authorized to speak with the Department of Justice on this matter."
Trump had previously said at a rally before the inauguration that the AT&T-Time Warner tie-up would be “too much concentration of power in the hands of too few.” The jab at AT&T and Time Warner surprised policy analysts who said presidents and candidates for office generally avoid commenting on pending deals for fear of influencing — or appearing to influence — the process.
Democrats jumped on the news to accuse the administration of putting politics ahead of policy.
Jessica Rosenworcel, a Democratic commissioner on the Federal Communications Commission, tweeted late Wednesday: “Wait, are we really going to make the @TheJusticeDept use antitrust law to force the sale of a cable channel because the President doesn’t like its news coverage? You can dislike consolidation but still find this extremely disturbing if true.”