Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Time Warner's Jeff Bewkes and AT&T's Randall Stephenson before testifying about the deal. Photo: Evan Vucci / AP

If the U.S. Justice Department were to sue over its demands that AT&T sell Turner (owner of CNN and other channels) or DirecTV in order to have its $85 billion purchase of Time Warner approved, as reported Wednesday, lawyers say the regulators will be fighting decades of precedent.

Why it matters: Speculation is swirling about the DOJ's motives, in light of President Trump's campaign trail promise to block the deal, and his vocal disdain for CNN's coverage.

Theory of the case: Critics of the proposed AT&T-Time Warner merger argue that a combination of companies in different but related markets (i.e., a vertical deal) can be as harmful as a horizontal combination of two companies that compete directly with one another.

  • Asking AT&T to sell either DirecTV or Turner could be based on the idea that owning both a major content producer (particularly in sports and news) and a nationwide video provider would enable the combined entity to push competitors around.
  • For example, AT&T+Time Warner could provide free data for customers to watch certain content (a.k.a. "zero rating"). Currently, AT&T customers using the DirecTV Now streaming service can watch most programs without eating into their monthly data allotment. Zero-rating has been one recent focus in the DOJ's evaluation of the case. A source familiar with the matter says that the agency has looked into the effect that DirecTV Now has on DirecTV's broader customer base.

Where it gets complicated: For decades, antitrust regulators have worried more about horizontal mergers than vertical ones, and courts have generally backed up that approach.

  • They'd also be bucking the status quo on another front. If antitrust enforcers have concerns about a deal, they typically ask the companies to commit to not engaging in certain actions. Asking the companies to sell off the parts of their business that could cause trouble for competitors, as the DOJ is considering, is more unusual.
  • AT&T's CEO said he doesn't plan to sell CNN and a Justice spokesperson said the agency doesn't comment on ongoing investigations.

The bottom line: The transaction is unexpectedly imperiled and may head into uncharted territory, were it to spark a lawsuit over over the right way to police competition.

Go deeper: The New York Times has a rundown of the different stories emerging from Ma Bell and DOJ.

Go deeper

3 hours ago - Politics & Policy

Kellyanne Conway's parting power pointers

Kellyanne Conway addresses the 2020 Republican National Convention. Photo: Nicholas Kamm/AFP via Getty Images

Kellyanne Conway has seen power exercised as a pollster, campaign manager and senior counselor to President Trump. Now that his term in office has concluded, she shared her thoughts with Axios.

Why it matters: If there's a currency in this town, it's power, so we've asked several former Washington power brokers to share their best advice as a new administration and new Congress settle in.

4 hours ago - Politics & Policy

GOP holdouts press on with plans to crush Cheney

Screenshot of emails to a member of Congress from individuals who signed an Americans for Limited Government petition against Rep. Liz Cheney. Photo obtained by Axios

Pro-Trump holdouts in the House are forging ahead with an uphill campaign to oust Rep. Liz Cheney as head of the chamber's Republican caucus even though Minority Leader Kevin McCarthy told them to back down.

Why it matters: What happens next will be a test of McCarthy's party control and the sincerity of his opposition to the movement. Cheney (R-Wyo.) is seen as a potential leadership rival to the California Republican.

Democrats aim to punish House GOP for Capitol riot

Speaker Nancy Pelosi passes through a newly installed metal detector at the House floor entrance Thursday. Photo: Drew Angerer/Getty Images

House Democrats plan to take advantage of corporate efforts to cut funding for Republicans who opposed certifying the 2020 election results, with a plan to target vulnerable members in the pivotal 2022 midterms for their role in the Jan. 6 violence.

Why it matters: It's unclear whether the Democrats' strategy will manifest itself in ads or earned media in the targeted races or just be a stunt to raise money for themselves. But the Capitol violence will be central to the party's messaging as it seeks to maintain its narrow majorities in Congress.