AT&T Makes Case for Deal -- WSJ
November 29 2017 - 3:02AM
Dow Jones News
By Brent Kendall
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (November 29, 2017).
WASHINGTON -- AT&T Inc. and Time Warner Inc. said an
explosion of online programming has spawned a "golden age for
television -- and for consumers," in its first court filing
countering government claims that their planned merger would stymie
competition and hurt customers.
Antitrust officials at the Justice Department filed suit last
week to challenge the deal, alleging AT&T's acquisition of Time
Warner would give one company too much control in a rapidly
evolving media landscape.
AT&T, in a formal written answer to the lawsuit on Tuesday,
said the video marketplace is changing quickly and is "intensely
competitive," and that nothing about the Time Warner deal would
harm that.
AT&T said online rivals like Netflix Inc. and Amazon.com
Inc. were spending billions of dollars on developing and streaming
video content, and that leading tech companies like Apple Inc.,
Google and Facebook Inc. were doing the same.
The companies said there was nothing anticompetitive about
combining Time Warner's content -- like HBO and the Turner networks
-- with AT&T's distribution of video through its satellite,
broadband and wireless networks. They said merging the two would
bring benefits to the public.
The Justice Department has argued that a postmerger AT&T
would be able to use its expanded leverage to demand that rival
cable and online video distributors pay more for the right to carry
Time Warner's networks.
AT&T and Time Warner criticized that assertion, citing
Google's new "YouTube TV" service, which launched with the four
main broadcast networks, ESPN and other channels, but no Time
Warner channels.
That example "confirms not only that the television ecosystem is
awash in content, but that Time Warner's networks are not, in any
antitrust sense of the word, essential to attracting and retaining
subscribers," the companies said in the filing.
The companies also said that, contingent on the closing of the
merger, Time Warner's Turner division has offered video
distributors licensing terms for seven years that entitle those
distributors to arbitration if they can't reach satisfactory
agreements to carry the Turner networks, which include TBS, TNT and
CNN. Turner also would be forbidden from "going dark" on those
video distributors during any impasse that results in arbitration,
the companies said.
A Justice Department spokesman said the government was reviewing
the companies' filing.
The department's lawsuit, filed Nov. 20 in a Washington, D.C.,
federal court, heralds one of the biggest antitrust cases in many
years.
U.S. District Judge Richard Leon hasn't yet scheduled any
initial proceedings in court.
In a separate filing late Tuesday, AT&T and Time Warner
proposed that Judge Leon start a trial on Feb. 20, 2018 and
schedule 10 days of proceedings. The companies said they were at an
impasse with the government on reaching a scheduling timeline. They
said the Justice Department was proposing that a trial start on May
7, 2018, a date that would come after the merger agreement is set
to expire on April 22, 2018.
Write to Brent Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
November 29, 2017 02:47 ET (07:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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