AT&T-Time Warner Merger Gets The Green Light From Federal Court

AT&T-Time Warner Merger Gets The Green Light From Federal Court

U.S. District Judge Richard Leon said the government failed to meet its burden of proof in its antitrust suit against the AT&T-Time Warner merger.

"The impact from this decision will have wide-reaching ramifications across the telecommunications, media, and tech industry for decades to come", said GBH Insights analyst Dan Ives. It argued a combined AT&T-Time Warner could act like an internet company and use consumer data to offer more targeted advertising, and adapt more easily to compete with Netflix and Amazon. The U.S. Justice Department opposes the purchase, but was urged by Leon not to seek a stay of his decision.

The decision comes despite criticism from Trump, a frequent detractor of Time Warner's CNN and its coverage. "We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner".

But AT&T rejected that idea, stating in a court filing that, "Divestitures here would destroy the very consumer value this merger is created to unlock". AT&T CEO Randall Stephenson also said a year ago, "You shouldn't expect that we would sell something larger [than CNN] to get the deal done".

Gary Ginsberg, executive Vice President of Time Warner, said that they were happy with the decision. Stephenson said Watch would only be possible if the merger went through. AT&T has been the nation's largest pay-TV company since it acquired DirecTV in 2015, and is one of the largest providers of home and mobile broadband service.

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"Allowing this merger to proceed raises serious concerns for consumers and the future of American media, and also sends a troubling signal to others that it's open season for vertical mergers that could allow a company to raise the cost of essential products and services that its rivals need to compete, leading to higher costs for consumers and less innovation", Klobuchar said.

Disney's $52.4 bid for major pieces of 21st Century Fox is pending a vote by Fox shareholders. Comcast and Verizon are also jockeying for position in the new landscape. Last fall, he presented AT&T and Time Warner with two options: Sell the majority stake in either DirecTV or Turner Broadcasting. The government's star witness was Carl Shapiro, an economist at the University of California, who used an economic model to predict that consumer cable bills could rise by $500 million annually in aggregate by 2021.

Leon ruled that AT&T can buy all of Time Warner without any conditions, such as selling certain assets or agreeing to refrain from raising prices.

In the past, the federal antitrust attorneys didn't seem to be bothered if auto manufacturers owned the companies that stamped out fenders or auto bodies. The theory seems to be that the merged company would simply forgo this revenue in a speculative hope that withholding Time Warner content from distributors would induce masses of viewers to switch to AT&T-and maybe, one day, put competitors out of business. The combination would push technology forward and give consumers more choices, AT&T has promised.

"That's well above the current $101.72 price TWX holders would obtain if the T deal closes with T shares at current levels", Jayant wrote.

South Koreans Hopeful Peace Will Prevail
US President Donald Trump has arrived in Singapore for Tuesday's historic summit with North Korea's Kim Jong-un. This has included backing away from an original demand for North Korea's swift denuclearisation .

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