US: DOJ wants to limit AT&T-Time Warner from using arbitration offer in defense

At a trial beginning Monday, March 12, concerning the proposed AT&T/Time Warner merger, the US Department of Justice (DOJ) has asked a judge to preclude evidence or testimony about Turner Network’s offer to submit to “baseball-style” arbitration whenever the owner of CNN and TBS reaches an impasse with a cable or satellite distributor.

AT&T-Time Warner made an offer to agree to go into “baseball-style” arbitration in any Turner Networks carriage disputes with distributors. The offer, unveiled after the government filed its antitrust lawsuit on November 20, would extend for a period of seven years after the merger is completed. It also said it would not engage in any blackout of channels during the arbitration.

But the DOJ says such an offer is “inconsistent with the structural focus of the Clayton Act, irrelevant, and therefore, inadmissible.” It also says it would “waste trial time and confuse the proceedings,” and that it does “not alter the structure of the underlying acquisition.”

DOJ lawyers say an offer to go to arbitration whenever there is a license dispute is not really enforceable and that a judge should first decide if the AT&T-Time Warner merger is unlawful before tackling remedies.

AT&T-Time Warner, however, says they made the arbitration offer “as a good-faith effort not only to address this alleged theory of harm, but also to confirm that they never had any intention to engage in such behavior in the first place.”

Full Content: Variety

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