Home / Business / AT & T court battle with the US Department of Justice leads to closing arguments

AT & T court battle with the US Department of Justice leads to closing arguments

WASHINGTON (Reuters) – Attorneys at the US Department of Justice and AT & T ( TN ) will be closing arguments in a lawsuit on Monday to determine if the wireless giant, owner of pay-TV The provider DirecTV, will be allowed to buy movie and television show maker Time Warner ( TWX.N ).

AT & T Chief Executive Officer Randall Stephenson (L) is leaving the scene with David McAtee (C), SEVP and General Counsel for AT & T, and Daniel Petrocelli (R), attorney for O & # 39; Melveny & Myers LLP., After a news conference in NYC, New York, USA, November 20, 2017. REUTERS / Shannon Stapleton

The Department of Justice sued the $ 85 billion agreement and said it would pay higher prices for competing TV companies lead.

The government has argued that AT & T views the merger as a way to persuade viewers to stay on pay-TV instead of switching to cheaper online providers, citing a report in which an AT T & T manager said, Time Warner to buy AT & T slows down the decline in pay-TV subscriptions, which were referred to as "Cash Cow".

FILE PHOTO: A Time Warner logo is featured in a Time Warner store in New York on October 23, 2016. REUTERS / Stephanie Keith / File Photo

AT & T's satellite television service DirecTV lost 187,000 traditional US video customers in the first quarter of 2018.

The judge's decision, expected in several weeks, will give dealmakers an idea of ​​how aggressive they can be when buying suppliers, which is known as a vertical merger under antitrust law. Until then, vertical closures have been widely accepted by regulators as being eligible.

Two key witnesses to the trial were AT & T CEO Randall Stephenson and Time Warner CEO Jeff Bewkes, who will retire when the transaction is completed.

The two executives argued that blending AT & T's detailed information about customers with Time Warner's ability to produce compelling video would enable more effective advertising and give the merged company a chance, with titans like Facebook and Google compete.

They also denounced the idea that AT & T would reluctantly license Time Warner content such as CNN or March Madness Basketball to other pay-TV competitors or to cheaper online video companies, as "ridiculous" and "absurd" – a decisive government argument.

Hoping to prevent litigation, AT & T suggested that they settle disputes with distributors for seven years on pricing for Time Warner networks and promise not to obscure programming during arbitration.

But smaller pay-TV rivals, known as government witnesses, argued that this was inappropriate. Warren Schlichting, Dish Network Group President ( DISH.O ) Sling TV, argued that AT & T's offer was inadequate as it was limited to 7 years and HBO was not part of the proposal.

Reporting by Diane Bartz, editor of Franklin Paul

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