US: AT&T-Time Warner judge asks about ‘Mutually Fair’ arbitration

The federal judge overseeing the AT&T-Time Warner antitrust trial asked whether a “mutually beneficial and mutually fair” arbitration would help alleviate concerns that the merger would leave the combined company with too much power and leverage, according to the Wall Street Journal.

US District Judge Richard Leon posed the question to Tom Montemagno, a senior executive with Charter Communications and a major rival to AT&T. He did not indicate whether he was asking the question as a way to find a potential merger remedy, or if it was to glean more insight about industry practices.

Montemagno, who as executive vice president of programming acquisition is tasked with negotiating for carriage rights for channels, had been critical of an offer by Time Warner’s Turner networks to go into “baseball-style arbitration” should the merger go through. The offer was made shortly after the Justice Department (DOJ) sued to block the merger, but Montemagno testified that it would be too risky for a multichannel distributor like Charter.

Much of the early trial testimony has focused on the DOJ’s claims that AT&T, which owns DirecTV, could use Time Warner’s popular Turner networks as leverage against rival distributors such as Charter Communications, Cox Communications and DISH Network.

AT&T has argued that it wouldn’t have the incentive or ability to force rivals to accept onerous terms for such Turner channels as TNT, TBS and CNN. It has also touted an offer it made to distributors that would allow the fees for those networks to be set through arbitration if necessary.

Full Content: Wall Street Journal

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