Justice Department Wants to Speed Up Appeal of AT&T-Time Warner Deal
July 18 2018 - 6:02PM
Dow Jones News
By Brent Kendall
WASHINGTON -- The Justice Department on Wednesday sought to
fast-track its appeal of the court decision allowing AT&T Inc.
to buy Time Warner Inc., while offering the first hints of its
legal arguments for the next phase of proceedings.
The department filed its appeal last week, a month after U.S.
District Judge Richard Leon rejected the government's antitrust
claims against the more than $80 billion deal, which AT&T and
Time Warner have since completed.
The Justice Department on Wednesday asked the U.S. Court of
Appeals for the District of Columbia Circuit to adopt an
accelerated timeline for the appeal, with all legal briefs filed by
mid-October and oral arguments to follow shortly thereafter. That
could allow the appeals court to reach a decision in early
2019.
AT&T, which would like to remove prolonged legal uncertainty
over the deal, doesn't object to the expedited timeline, according
to the government's court filing.
The Justice Department argued that any delay in deciding the
appeal "will make it increasingly difficult to unwind the merger,"
if the government wins.
AT&T previously has agreed to hold Time Warner's Turner
cable networks in a separate business unit through next February
during any appeals-court proceedings.
If no appeals decision has been reached by then, "AT&T
immediately can be expected to exercise the increased bargaining
leverage that it would gain from control of Turner," the Justice
Department said in Wednesday's filing.
The department argued during a six-week trial this spring that
AT&T, which owns DirecTV, could demand higher fees for "must
have" Turner networks like TNT, TBS and CNN, which would put rival
cable and satellite TV providers at a disadvantage and lead to
higher prices.
Judge Leon rejected those arguments and agreed with AT&T
that acquiring Time Warner wouldn't give the merged company
anticompetitive leverage.
AT&T said the merger would help the companies compete for
advertising dollars and better deliver video products to wireless
subscribers.
The Justice Department's court latest filing signaled that a key
part of its appeals argument will be that Judge Leon erred by
disregarding fundamental economic principles about how two
companies bargain during contract negotiations.
The department said the merger makes AT&T and Time Warner
"less vulnerable to economic harm" when the merged firm negotiates
future contracts with rival TV providers on fees for carrying the
Turner networks. That means AT&T "can and will credibly hold
out for higher fees," it said.
"The district court's disregard of economic reasoning
constitutes reversible error," the Justice Department argued.
AT&T didn't immediately respond to a request for
comment.
Write to Brent Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
July 18, 2018 17:47 ET (21:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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