AT&T received contrasting news from regulators in Latin America reviewing its Time Warner acquisition, with a green light in Mexico accompanied by concerns from Brazil.

Mexico’s Instituto Federal de Telecomunicaciones (IFT) and Comision Federal de Competencia Economica (COFECE) both approved the transaction, which is expected to close by the end of this year, the operator said.

“We appreciate the work of both COFECE and IFT to review, analyse and approve the AT&T-Time Warner merger on its merits,” said David McAtee, senior EVP and general counsel at AT&T.

Meanwhile Brazil’s Administrative Council for Economic Defense (CADE) sent its opinion on the deal to the country’s Administrative Tribunal, highlighting concerns about coordination between Time Warner and pay TV operator Sky, which is controlled by AT&T in this market (following its earlier DirecTV acquisition).

CADE advised “the transaction should not be approved in the form that was presented”. The watchdog said both Sky and Time Warner “have considerable market power”, with the combination creating incentives for “market foreclosure” in the licensing/programming market and in pay TV, causing competition concerns.

The deal would give Time Warner access to sensitive information on its competitors through Sky, and grant AT&T access to conditions negotiated by its rivals through Time Warner. It would also have “the ability and incentives” to adopt discriminatory measures, weakening the competitive environment.

It was also suggested the deal could create “new incentives towards coordination – even tacit” between the two biggest pay TV programmers (Globosat and Time Warner) and the two biggest operators in the sector (Net/Claro and Sky).