AT&T and Time Warner argued in a court filing this week that their proposed merger is “pro-competitive” and “pro-consumer” after the Justice Department sought to block it in an antitrust lawsuit.
The DOJ suit, filed last week, claimed that the $85 billion deal could harm American consumers and hinder competition. It also the merger could enable AT&T to use its control over Time Warner’s popular networks, like HBO, CNN, and TBS, to force rivals to pay hundreds of millions of dollars more per year for distribution rights.
In the Tuesday filing, obtained by NBC, AT&T asserted that the transaction is a “classic vertical deal” and would not eliminate any competitors from the marketplace.
The telecom giant also argued that in the current television age, the proposed merger is a “pro-competitive, pro-consumer response to an intensely competitive and rapidly changing video marketplace.”
AT&T pointed to the billions of dollars tech giants are funneling into video content and contended the merged company was needed to effectively complete against leading cable incumbents and the likes of Netflix, which plans to spend $17 billion on streaming content over the next few years.
“Apple, Google, and Facebook, with billions of users and a combined market capitalization of more than two trillion dollars, are likewise investing billions of dollars in their own video offerings,” attorneys for the companies wrote.
AT&T also cited the DOJ’s decision not to oppose the Comcast and NBCUniversal vertical merger in 2011.
The document outlined remedies Turner already offered to distributors contingent on the deal closing, including forbidding Turner programming from going dark during any potential arbitration over licensing terms.
AT&T filed a second motion proposing a trial date of February 20, 2018. The DOJ proposed a trial start date of May 7, 2018, which would come after the companies’ recently extended merger deadline of April 22.
“These documents offer even more conviction to our belief that [AT&T] T is gearing up for a courtroom fight,” Wells Fargo Senior Analyst Jennifer Fritzsche wrote in a note to investors Wednesday. A February start date would be viewed as favorable as it could help start an “expedited trial,” she added.
Filed Under: Industry regulations