READY TO RUMBLE
Feds’ AT&T suit called winnable
Get ready for an epic battle between AT&T and the US Department of Justice that could land in a courtroom — and drag into next year.
The DOJ is pushing AT&T and Time Warner to sell big chunks of their business, including possibly CNN, in order to clear their $85 billion mega-merger, according to reports, and AT&T is digging in its heels.
Speaking at a Thursday conference, AT&T Chief Executive Randall Stephenson denied reports that he has considered selling CNN, which has long been a target for President Trump.
Selling the cable news network, whose coverage Trump has complained is biased against him, “makes no sense,” Stephenson said, signaling that he was girding for a court battle. “We have been working very diligently on a litigation strategy,” the telecom bigwig added.
Media reports have suggested that the DOJ’s recent threats against AT&T are politically motivated, noting Trump openly pledged to block the merger when it was announced last year, just weeks before he was elected president.
But politics aside, the feds have a winnable case against AT&T if they sue to stop the deal, a former top DOJ official requesting anonymity told The Post.
“Hillary [Clinton] would have likely killed this deal” — and it’s likely that William Baer, President Obama’s antitrust chief at the DOJ from 2013 to 2016, would have blocked it, too, said the source, who isn’t working on the merger.
It has been decades since the DOJ sued to stop a “vertical merger” like AT&T/Time Warner, whereby two companies that operate in different spaces combine.
However, if a vertical combination is anti-competitive, it can be blocked. In this deal, a key concern is that AT&T, which owns DirecTV, might withhold programming from Time Warner’s CNN, HBO, TNT and TBS channels from cable rivals including Charter Communications, the source said.
In a courtroom, the DOJ would have to show that DirectTV would make more in added subscribers by withholding content then it would lose in lost revenue from programmers, the source added.
Stephenson on Thursday was asked if he thought there was a Trump factor in the de- cision to challenge his merger.
“I have no way of even answering the question to the positive or negative,” he said.
Some at the DOJ regret having cleared Comcast’s 2011 purchase of NBCUniversal with so-called “behavioral remedies” that depend on companies living up to prom- ises. In that case, Comcast agreed to provide programming to any internet provider on the condition that the provider secured programming from two other networks.
Since that time, no internet provider has succeeded in launching its own cable-like network, leading some to believe the consent decree was a failure, the former DOJ official said.
Stephenson maintained that combining AT&T and Time Warner would help his company succeed against Amazon, Google, Facebook and Netflix.
“We hope for a shot at competing with them.”