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Illustration: Sarah Grillo/Axios

A federal judge will decide Tuesday whether AT&T can acquire Time Warner for $85 billion.

Why it matters: Today's court decision will shape the media and telecom landscape, as it will set off chain reactions for other media mergers and will help determine how viewers watch video content for decades to come.

There are a range of possible outcomes. Judge Richard J. Leon could choose one of two straightforward options: clearing the deal or blocking it outright.

But he could also green-light the purchase only if certain conditions are met, regardless of whether he finds that it violates antitrust law.

  • Leon could order that arbitration be used to defuse concerns about AT&T using Time Warner's content as leverage to gain an advantage over competitors in the video space, after AT&T already indicated it may be open to using that process.
    • That could, in theory, allow programming negotiations to take place without the threat of a "blackout," where a programmer pulls its content from a distributor when they can't reach a deal.
  • He could tell the merging companies to sell off key assets, which would be less palatable to AT&T.
    • Selling either DirecTV or the Turner networks (or a portion of them), including CNN and TNT, would undermine the central benefits of the deal for AT&T. DOJ requested some divestitures before filing its lawsuit, and AT&T refused.

Between the lines: A win for AT&T would probably make it easier for TV networks to merge with a tech or telecom company — essentially fusing the content delivery systems with the content itself.

  • Other deals at stake: If AT&T prevails, it could cause 21st Century Fox to seriously consider Comcast's higher offer over Disney's bid. An AT&T win also bolsters T-Mobile's case to regulators that it should be allowed to buy Sprint.
  • Beyond tech and telecom deals: It would signal to all U.S. companies that a vertical merger — combining with a company they don't directly compete with — has a decent shot of getting regulatory approval.

On the other hand: A win for DOJ will raise questions about a slew of outstanding deals, including in media and telecom as well as industries like healthcare, where CVS is trying to buy Aetna, and Cigna wants to acquire ExpressScripts.

The back story: The verdict follows a more than six-week long trial after the government sued to block the mega deal.

  • There were rumblings that the DOJ's lawsuit seeking to block industry consolidation — a surprising position for a Republican administration — came in response to political pressure from the White House. President Trump was critical of the merger on the campaign trail because Time Warner owns CNN, whose coverage he dislikes.
  • AT&T originally tried to discredit the DOJ's lawsuit by claiming political bias, but leaned more heavily on the argument that it needs to acquire Time Warner to compete with Silicon Valley tech companies, like Google and Facebook, after a judge denied them access to key documents they would have needed to make that charge.

What we're hearing: News coverage and analysts' notes over the past several months have suggested that the DOJ failed to deliver a compelling argument to block the merger. But those headlines could be over-simplifying the logic of the case.

  • All the DOJ needs to prove is that the merger may substantially lessen competition. The DOJ claims the merger could increase TV bills by hundreds of millions of dollars a year by 2021, though that balances out to an increase of less than $1 on a customer's monthly bill. It's up to the judge to determine whether that number is enough consumer harm to stop the deal.

What to expect: Leon has called reporters and stakeholders back to the court room to issue an official ruling Tuesday afternoon. This is highly unusual for a district court judge, and could foreshadow a complex ruling.

Go deeper

Updated 3 hours ago - Politics & Policy

Omicron dashboard

Illustration: Shoshana Gordon/Axios

  1. Health: CDC director says number of U.S. Omicron cases "likely to rise" — Two years of COVID-19 — Prior coronavirus infections may not protect well against Omicron.
  2. Vaccines: Data demonstrates most-vaccinated counties less vulnerable to worst of COVID — Omicron adds urgency to vaccinating world — Omicron fuels the case for COVID boosters.
  3. Politics: Nevada to impose insurance surcharge on unvaccinated state workers — New Jersey GOP lawmakers defy statehouse COVID policy — Oklahoma sues Biden administration over Pentagon vaccine mandate.
  4. World: Vaccine mandates lose steam in the U.S. while Europe doubles downWHO: Delta health measures help fight Omicron — COVID cases surge in South Africa in sign Omicron wave is coming.
  5. Variant tracker: Where different strains are spreading.

Vulnerable Democrats: Less Trump talk

Illustration: Aïda Amer/Axios

Vulnerable House Democrats are convinced they need to talk less about the man who helped them get elected: President Trump.

Why it matters: Democrats are privately concerned nationalizing the 2022 mid-terms with emotionally-charged issues — from Critical Race Theory to Donald Trump's role in the Jan. 6 insurrection — will hamstring their ability to sell the local benefits of President Biden's Build Back Better agenda.

Updated 4 hours ago - Politics & Policy

Bipartisan tributes flood in for "giant of the Senate" Bob Dole

Then-Vice President Joe Biden and former Sen. Bob Dole at an event put on by the World Food Program at which he was awarded the first “McGovern-Dole Leadership Award” in December 2013. Photo: Douglas Graham/CQ Roll Call

Republican and Democratic politicians, including former Senate colleagues, are sharing condolences and memories commemorating the life of Bob Dole, who passed away at 98 on Sunday morning.

The big picture: Dole, the Republican presidential nominee in 1996, was the longest-serving Republican leader in the Senate until 2018, when current Senate Minority Leader Mitch McConnell surpassed his record.