Decide rejects U.S. demand to exclude AT&T argument in Time Warner merger trial

WASHINGTON (Reuters) – AT&T Inc (T.N) can cite a voluntary dedication to not withhold content material in licensing talks as a key a part of its protection when an antitrust trial begins subsequent week over the destiny of the corporate’s deliberate $85 billion merger with Time Warner Inc (TWX.N), U.S. District Decide Richard Leon mentioned on Tuesday.

An AT&T brand is pictured in Pasadena, California, U.S., January 24, 2018. REUTERS/Mario Anzuoni – RC143F0BE390

The Justice Division filed a lawsuit in November to cease AT&T, which owns DirecTV and different merchandise with 25 million subscribers, from shopping for film and TV present maker Time Warner, which owns HBO and CNN, amongst many different channels. A trial is ready to begin on Monday.

The federal government argues the merger would hike pay TV subscribers payments by 45 cents a month, citing an knowledgeable evaluation.

AT&T contends that evaluation is fatally flawed as a result of it doesn’t embrace its dedication for seven years to comply with binding arbitration over disputes with distributors like DISH Community Corp (DISH.O) or Comcast Corp (CMCSA.O) over licensing phrases.

The dedication, AT&T and Time Warner mentioned in a authorized submitting launched on Tuesday, “is a concrete assurance that this merger has by no means been about elevating the value of Turner content material.”

Time Warner’s Turner owns CNN, TBS, TNT and different networks that air information, sports activities and different programming. Final yr, the federal government demanded AT&T comply with divest Turner as one supply to approve the merger.

The Justice Division had urged Leon to exclude the dedication, arguing the AT&T dedication was a “unilateral promise” that was not related as to whether the transaction lessens competitors. Leon rejected the Justice Division’s argument that the difficulty would “waste the court docket’s restricted time and confuse the proceedings.”

John Stankey, the top of AT&T’s leisure group who is ready to go the mixed firm’s media enterprise, mentioned in a deposition that the corporate wouldn’t withdraw the dedication.

The federal government’s evaluation assumed the mixed AT&T Time Warner would have “bargaining leverage” that it may use to compel distributors to pay increased costs for Turner networks, citing a mannequin by an economist, AT&T mentioned.

The Justice Division mentioned 20 of 1,000 distributors had agreed to the arbitration supply made in November. AT&T mentioned it modeled the dedication on a provision of the phrases of the Comcast acquisition of NBCUniversal.

Leon additionally denied a request by 11 former Justice Division officers to rethink his refusal to permit AT&T to demand communications between the White Home and Justice Division in regards to the merger probe.

Reporting by David Shepardson; Enhancing by Rosalba O’Brien and Lisa Shumaker

Yasir Ali
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