Lawyers for the Department of Justice (DOJ) and telecom giant AT&T on Tuesday previewed their cases ahead of opening arguments Wednesday as the company seeks permission to merge with Time Warner Inc.
Reuters reports that the Trump administration argues that should the merger go through, AT&T could force Time Warner customers to sign up for its DirectTV service by withholding programming to them.
{mosads}The Justice Department is suing to block the $85 billion merger, arguing it would raise rates for customers and harm competition. The merger, the DOJ estimates, would cause the average American’s cable bill to rise by about 45 cents.
Attorneys for AT&T countered, saying that such a plan would be “catastrophic” for its business and would lead, instead, to customers flocking to competitors.
Witnesses for AT&T are expected to lay out arguments stating that internet-based companies such as Netflix and the Google-owned YouTube are changing the way people consume media, while traditional cable companies are being left behind. Such competition, the lawyers say, prevents a monopoly from being formed by the AT&T-Time Warner merger.
“They are running away with the industry,” said AT&T lawyer Daniel Petrocelli. “Cable bills can’t go up any more because people won’t pay any more.”
Officials from YouTube and other companies, meanwhile, are expected to testify on the importance of Time Warner’s Turner family of TV stations to the company’s competitors, networks that could become a key bargaining chip in future licensing negotiations.
Still, lawyers for AT&T were adamant last week in court filings that there was no evidence rates would increase or competition would be stifled by the merger.
“There is no fact-based evidence that this merger will harm competition,” the companies said in a trial brief. “Nothing will be withheld from competitors; consumer prices will not go up.”
The case has been in the national spotlight since President Trump first mentioned the deal as worrying during his campaign.
Now in office, Trump has called the proposed merger “not good for the country.” The White House has denied the president sought since taking office to influence the DOJ’s decision to try to block the merger.
AT&T has sought to make the possibility of Trump influence a key to its case and requested communications between the DOJ and White House. A judge denied that request.
—Harper Neidig contributed.