Partners: AT&T-Time Warner Deal Could Shift Focus Away From Core Networking Portfolio

The closely-followed debate over the so-called "landmark" merger between AT&T and Time Warner is slated to come to an end on Tuesday when the decision regarding whether the two can come together will be announced.

If the $85.4 billion deal is indeed given the green light by a federal judge, solution providers believe that carriers could shift their focus to media content, perhaps at the expense of their foundational connectivity and networking services.

"Every [telecom] is going to think they need a content provider now," said Patrick Oborn, co-founder of Sandy, Utah-based master agent Telarus.

[Related: Further Telecom M&A Hinges On Outcome Of AT&T-Time Warner Deal, Partners Say ]

AT&T first announced its intent to acquire media giant Time Warner in 2016. The Department of Justice sued to block the deal, and the six-week long court battle began in March. U.S. District Court Judge Richard Leon is expected to either approve or deny the deal on Tuesday, giving the two companies until June 21 to complete the $85.4 billion deal, if approved.

The Justice Department has argued that an AT&T-Time Warner tie-up would hurt competition, and give AT&T room to raise prices on its customers. Dallas-based AT&T didn't expect a challenge on its vertical acquisition -- a deal that would combine two companies that don't directly compete against one another. AT&T has said that the merger will allow it to better compete against the likes of Facebook, Apple, Amazon, Netflix and Google as the content and video market transforms.

Separately, both AT&T and Time Warner are large carriers that have been historically hard to work with, and combined, the two companies aren't likely to create positive changes for consumer or business users, like encourage competition or lower prices, according to one telecom agent partner who asked not to be named.

"In my opinion, a merger would be terrible," the solution provider executive said. "It's two big carriers that are already hard to deal with, so I'm not sure what processes they'd put in place to make things better. I think they're moving in the wrong direction, especially because AT&T already owns DirecTV."

Solution providers said that the content-focused merger could distract AT&T from focusing on its bread-and-butter connectivity portfolio.

"[AT&T] has made a really good push this year, focusing on the channel, so it makes us a little nervous if they aren't going to be focusing on their core networking business, which is what partners are selling," said Shane Stark, director of vendor and channel relations for Clive, Iowa-based solution provider Carrier Access.

A spokesperson for AT&T declined to comment on the proposed merger's potential impact on the channel.

On the other hand, Rickie Richey, CEO of AT&T Platinum Partner Exchange reseller partner Altaworx, believes that the deal could give partners access to new selling opportunities, such as TV services.

From a channel standpoint, partners run the risk of being diminished by industry consolidation. The value of a solution provider that is often bringing together multiple offerings across several providers could decline as the market shrinks, Carrier Access' Stark said.

"Businesses come to us because we can give them more options and they don’t have to deal with the carriers themselves. Consolidation isn't good for us as we try to bring multiple solutions to the table [and] help customers through the weeds," he said. "The less possibilities, the easier it is for customers to figure it out on their own."

Because the so-called vertical deal is focused on obtaining content from a provider in a different market, the transaction, if passed, shouldn't negatively impact business in the channel, Richey said.

"It's not as if AT&T is buying Verizon," Richey said.