Stakes high for AT&T as courtroom fight looms
Feds are trying to block buyout of Time Warner
The Justice League could have resolved this battle in an epic way.
Instead, AT&T’s fight to buy Time Warner — home to DC Comics heroes Batman, Superman and Wonder Woman, as well as HBO’s Game of Thrones and CNN — heads to a highstakes throw-down with the Trump administration in the quieter confines of a Washington courtroom Monday.
The nation’s largest telecom company, which counts one-third of Americans among its wireless customers, wants to convince the court that its $85 billion deal for buying media powerhouse Time Warner will help consumers. Its opponent, the Department of Justice, says the deal must be stopped.
The stakes are high for AT&T and could change how viewers watch the next decade of TV shows and movies — and how they pay for it.
An AT&T victory would give the bigger company the firepower to produce more and better streaming services, and it could open the floodgates to more entertainment deals. But it also, according to the Trump administration, could raise costs for consumers.
The case is the most important antitrust case since those that led to
the breaking up of AT&T, completed in
1984, and the Department of Justice’s attempt to block Microsoft from using its Windows operating system to monopolize software such as Web browsers on computers.
And consumers can follow along because the case “is about things consumers do every day,” said Jeffrey Blumenfeld, a partner with Lowenstein Sandler in Washington. He was a Department of Justice trial attorney in the AT&T divestiture case. “People are streaming Amazon and Netflix and are watching stuff on cable. ... So it’s a good opportunity to see what antitrust is about in these areas ... what is procompetitive and what is not.”
In the 11⁄ years since AT&T an
2 nounced its intentions to acquire Time Warner, the Dallas-headquartered communications and media company’s motives for the merger have intensified.
Revenues have stagnated in the saturated wireless industry, and so too has traditional pay-TV revenue from AT&T’s DirecTV satellite service and U-verse fiber-delivered TV service. Adding Time Warner’s immense and valuable library of movies, TV and live programming would expand AT&T’s ability to offer new streaming video services to the growing mobile and non-traditional video audiences.
That could be all-important for consumers, because without the deal, AT&T and Time Warner separately could be left weaker, compared with competitors such as Comcast and Disney, and less willing to deploy new services or green-light new movies and TV series.
Conversely, the Justice Department contends the merger is anti-competitive and would raise costs for TV operators wanting to distribute Time Warner content, increases that would likely be passed on to consumers.
Looming over the trial is the Trump factor. The president has said the merger would concentrate too much market power in one company. “AT&T is buying Time Warner, and thus CNN, a deal we will not approve in my administration,” he said in October.