US: AT&T fires back to preserve its Time Warner deal

Fighting to defend its $81 billion takeover of Time Warner from a government challenge, AT&T is arguing that the US Justice Department (DOJ) has failed to show that the merger will raise prices for pay-TV programming and for the consumers who watch it.

In a filing Thursday, AT&T asserted the merger will save it money on content from Time Warner’s Turner Broadcasting, enabling it to cut charges to its DirecTV customers by at least $78 million a year.

US District Judge Richard Leon was correct to dismiss the government’s argument that the merger would hurt competition, limit choices and jack up prices for consumers to stream TV and movies, AT&T said in its filing. The government “failed for multiple reasons to (show) that net retail prices will likely be higher than otherwise,” the company said.

The DOJ, however, has maintained that Judge Leon was wrong in concluding the merger won’t harm consumers and that he misunderstood the complexities of the booming pay-TV market and the nature of AT&T’s competitors.

The DOJ contends that this deal is different. By combining the programming content of Time Warner’s Turner Broadcasting with AT&T’s vast distribution network for its DirecTV, the combination will hurt competition and violate federal law, it says.