AT&T trial offers dueling views of TV’s future
Published 12:00 am Sunday, March 25, 2018
WASHINGTON — The much-watched antitrust trial between the Justice Department and AT&T began Thursday, with opening statements that presented starkly different visions for how the company’s blockbuster merger with Time Warner would fit into a media industry upturned by the internet.
Before a packed courtroom with some of the industry’s leading figures, the two sides zeroed in on the case’s central question: whether the deal would force consumers to pay more to watch their favorite shows on Time Warner cable channels like CNN and TNT.
The Justice Department, which is suing to block the $85 billion deal, argued that AT&T, with its nationwide wireless and satellite TV business, could use Time Warner’s content as a “weapon” by raising the licensing fees those channels command. The government said that the merged company could charge rival cable and streaming companies more for popular channels. Those increases, the agency argued, would be passed on to consumers.
“If the merger goes forward, consumers all across America will be worse off as a result,” said Craig Conrath, the Justice Department’s lead lawyer.
AT&T and Time Warner said they would disprove the notion that the deal would raise prices. And they said that the combined company could compete with the giants of Silicon Valley: Amazon, Facebook, Netflix and Google. Those companies produce shows and distribute them on their websites. They dominate the market for the advertisements that run with videos streamed over the internet.
“The government’s theory is fundamentally stuck in the past,” said Daniel Petrocelli, the lead lawyer for AT&T and Time Warner. He said the merger would do the opposite of what the government asserts: The company would have no incentive to withhold Turner channels, which are owned by Time Warner.
“It would be financially ruinous if Turner were not as widely distributed as possible,” Petrocelli said.
The opening statements previewed the fierce legal battle that will play out before Judge Richard Leon of the U.S. District Court for the District of Columbia. His decision in the case will help set the direction for antitrust law for years to come.