US DoJ revives AT&T, Time Warner challenge

13 JUL 2018

AT&T prepared to defend itself in court once again, after the US Department of Justice (DoJ) filed to appeal a federal judge’s approval for the operator’s acquisition of Time Warner.

The operator received a green light in June after a judge rejected the DoJ’s argument the deal would harm competition and lead to higher prices for consumers. The operator closed the transaction two days later.

While the DoJ retained the option to appeal the verdict, its decision to do so seems to have caught AT&T by surprise.

“The court’s decision could hardly have been more thorough, fact-based and well-reasoned. While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DoJ has chosen to do so under these circumstances,” AT&T general counsel David McAtee said in a statement.

“We are ready to defend the court’s decision at the D.C. Circuit Court of Appeals.”

The move, however, elicited the support of consumer advocacy group Public Knowledge. In a statement, the organisation’s senior counsel John Bergmayer said the original decision “contained numerous errors, and we believe the DoJ’s position should be vindicated.”

Next steps
AT&T already started the process of integrating Time Warner into its business. If the DoJ’s appeal is successful and approval of the merger revoked, Recon Analytics founder Roger Entner and Jeffrey Blumenfeld, an antitrust lawyer for corporate law company Lowenstein Sandler, both told Mobile World Live that work will be unwound and the companies once again separated.

Entner predicted there’s little chance the DoJ will come out on top in the appeals court, but Blumfeld pointed out AT&T is in a tricky position.

While the appeal is supposed to proceed on the basis of the facts already put before the court during the original trial, Blumenfeld said the DoJ will likely raise the issue of AT&T’s recent $5 price increase for DirecTV Now subscribers.

AT&T can argue such evidence is not part of the record, but Blumenfeld noted it would be awkward for the operator to ask the court to ignore evidence which contradicts its assertion the deal will lower prices.

In a research note, Jefferies analysts said it could take “a year or more” before a final ruling is issued in the appeal.

Author

Diana Goovaerts

Diana joins Mobile World Live as its new US Editor, reporting on infrastructure and spectrum rollouts, regulatory issues, and other carrier news from the US market. Diana comes to GSMA from her former role as Editor of Wireless Week and...

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