Arthur J. Villasanta – Fourth Estate Contributor
Washington, DC, United States (4E) – AT&T, the world’s largest telecom firm, plans to close its $108 billion merger with Time Warner Inc. on June 20 after a federal judge in the District of Columbia ruled the deal could push through.
AT&T was once the largest pay-TV company since it acquired DirecTV in 2015, and is one of the largest providers of home and mobile broadband service. Time Warner owns HBO, Warner Bros., and Turner Broadcasting System, which owns cable news channel CNN.
The ruling was a stinging defeat for the Trump administration, which sued to block the deal. The Department of Justice (DOJ) said the merger was anti-competitive and will result in higher prices for consumers’ TV bills.
“AT&T/DirecTV would hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for Time Warner’s networks, and it would use its increased power to slow the industry’s transition to new and exciting video distribution models that provide greater choice for consumers,” said the DOJ in its complaint. “The proposed merger would result in fewer innovative offerings and higher bills for American families.”
U.S. District Judge Richard Leon, however, brushed aside these arguments and ruled entirely in AT&T’s favor. Leon’s ruling will allow AT&T complete the purchase without spinning off any subsidiaries.
Leon said the government failed to prove the merger will substantially lessen competition or that AT&T will use its ownership of premium content to harm rival TV providers.The government can appeal the decision, but Leon said that he’d reject any government motion for a stay that will again delay the deal.
As owner of Time Warner, AT&T will be able to set the price that other cable or satellite companies must pay for a large quantity of TV programming. Time Warner is the world’s third largest entertainment company in terms of revenue after Comcast and The Walt Disney Company.
“We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government’s lawsuit to block our merger with Time Warner,” said AT&T General Counsel David McAtee.
It’s not yet clear if the government will appeal. Makan Delrahim, the Assistant Attorney General for the DOJ Antitrust Division, said he was disappointed and will consider the government’s next steps.
DOJ sued to block the merger in November 2017. AT&T and Time Warner announced their proposed merger in October 2016.
AT&T argued the merger will help customers without harming AT&T’s business rivals, and that the combined company wouldn’t have enough market power to raise antitrust concerns. It claims customers will benefit from new bundles and offerings made possible by the merger, and the combined company will “develop new ad-supported video models that shift more costs to advertisers and off consumers.”
Consumer advocacy groups and come Democrats were dismayed by the ruling in favor of AT&T. US Sen. Amy Klobuchar (D-MN) urged the DOJ to appeal.
“Allowing this merger to proceed raises serious concerns for consumers and the future of American media, and also sends a troubling signal to others that it’s open season for vertical mergers that could allow a company to raise the cost of essential products and services that its rivals need to compete, leading to higher costs for consumers and less innovation,” said Klobuchar. “I urge the Justice Department to take swift action to appeal this judgment to ensure that competition and consumers are protected.”
Article – All Rights Reserved.
Provided by FeedSyndicate