Time Warner might get rid of dozens of licenses to avoid public interest review.

AT&T and Time Warner say they have a plan to avoid a Federal Communications Commission review of their pending merger.

An FCC review would be necessary if Time Warner transfers any FCC licenses to AT&T, but Time Warner might get rid of any such licenses before the deal is finished. "Time Warner has conducted a review of all licenses that it holds that are granted by the FCC," AT&T said in a filing with the Securities and Exchange Commission yesterday. "While subject to change, it is currently anticipated that Time Warner will not need to transfer any of its FCC licenses to AT&T in order to continue to conduct its business operations after the closing of the transaction."

AT&T did not elaborate on how the licenses would be disposed of.

"Time Warner has been looking to transfer or sell its licenses to another broadcaster for some time, according to a person familiar with the matter," Bloomberg reported today. "Time Warner can contract with third parties instead of owning the licenses, the person said."

This may be difficult. As we reported in October, Time Warner-owned programmers such as HBO, CNN, and Turner Broadcasting System have dozens of FCC licenses that let them upload video to satellites used by pay-TV companies. These licenses are "integral to their business," one industry lawyer who spoke with Ars at the time said.

Whatever happens at the FCC, the AT&T/Time Warner merger will be reviewed by the Department of Justice. While the Justice Department could sue to block the AT&T/Time Warner merger on antitrust grounds, the FCC reviews deals based on a "public interest" standard that forces the merging companies to prove that the deal is good for consumers.

AT&T is attempting to buy Time Warner for $85.4 billion. Time Warner, the programming giant, is a separate entity from Time Warner Cable, which was recently purchased by Charter.

President-elect Donald Trump opposed the AT&T/Time Warner merger during his election campaign. Although Trump transition team members reportedly reassured AT&T that the deal will be scrutinized without prejudice, "Trump remains opposed to the megamerger... because he believes it would concentrate too much power in the media industry," Bloomberg reported, citing sources close to Trump.

This smells like a ploy just to avoid the review but it might not be. Telecom companies have regularly done very similar things. I know t-mobile has sold their towers to a third party and then leased back the right to continue using them. I guess it would depend on who they are selling the licenses to. If it is an existing company that is already doing this type of thing then it may well be a legitimate sale that also happens to make the merger much easier. If it is some closely related subsidiary or newly minted company then it is just a dodge pure and simple.