US: AT&T attorneys critique DOJ, amicus economic analysis

According to Fox, AT&T and Time Warner attorneys questioned the method and motivation behind a consulting firm’s research used as a key factor in the government’s lawsuit to stop AT&T and Time Warner’s merger.

Stefan Bewley, a director at the San Francisco-based consulting firm Altman Vilandrie & Company, was called to the stand by the Justice Department (DOJ) to discuss his firm’s research, which was conducted last year on behalf of Charter, a cable and broadband company that is publicly opposed to AT&T’s proposed US$85 billion takeover of Time Warner.

The study was commissioned in November of 2016, about a month after AT&T announced the merger. It looked at many networks and included Charter’s potential subscriber loss if it were to lose Turner Broadcasting, a division of Time Warner that includes channels such as TNT, TBS and CNN.

The findings were also a key factor in the study conducted by U.C. Berkeley professor Carl Shapiro, who is serving as an expert witness for the government in the trial. Shapiro’s analysis found that a combined AT&T and Time Warner company could cause cable prices to increase by about 45 US cents per month, per subscriber.

Under direct questioning from DOJ attorney Craig Conrath, Bewley said that his research found that Charter could suffer a 9% subscriber loss due to a Turner blackout — when a distributor drops access to a channel during carriage negotiations.

Using that 9% rate, Shapiro came to his conclusion about the price increase should the merger go through.

But during cross-examination with AT&T and Time Warner lead attorney Dan Petrocelli, Bewley acknowledged that initially the 9% result was actually 5%.

Full Content: Fox 2 Now

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