US: TV bills will spike US$436m a year with AT&T-Time Warner merger?

If AT&T is allowed to buy Time Warner Inc., the Justice Department (DOJ) argued, it will raise the total annual US pay TV bill by US$436 million, reported Ars Technica.

The DOJ made that assertion in a trial brief (download the PDF here) last week, first reported on by Ars Technica. The DOJ is suing AT&T to block its US$85 billion bid to buy Time Warner.

“If TV program distributor AT&T acquires TV-program producer Time Warner, American consumers will end up paying hundreds of millions of dollars more than they do now to watch their favorite programs on TV,” the DOJ brief said. “In short, the transaction violates Section 7 of the Clayton Act, because its effect ‘may be substantially to lessen competition.’ Prices for current services will go up and development of emerging competition will slow down.”

The DOJ cites calculations by economics professor Carl Shapiro of the University of California at Berkeley, who will be one of the government’s expert witnesses at the trial, which starts Monday, March 19, at the US District Court for the District of Columbia. The DOJ summarized Shapiro’s analysis in its brief last week, but it will be presented in more detail at the trial.

Full Content: ARS Technica

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