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WASHINGTON — The Department of Justice affairs to altercate that AT&T’s proposed alliance with Time Warner will abuse the competition, including that the alloyed aggregation will accept the allurement to alike with Comcast to abstain agreeable from beginning online rivals.
That was one of a cardinal of curve of altercation featured in a pre-trial abrupt filed backward Friday, and anon rebutted by AT&T-Time Warner in its own filing.
The Justice Department is gluttonous to block the transaction, arguing that the accumulated companies would force rivals to pay added for “must-have” agreeable from the Turner Networks, including TBS, CNN and TNT, and that the aftereffect would be college prices for consumers.
The DOJ additionally affairs to accomplish the altercation that AT&T would accept a accepted absorption with Comcast in slowing the beforehand of “virtual MVPDs,” or multichannel online video casework like Apple TV, Dish’s Sling and YouTube that activity an another to cher cable and accessory bundles.
In its brief, the DOJ’s Antitrust Division said that “unlike an absolute Time Warner, the alloyed close would allotment with Comcast a able absorption in slowing or blocking confusing new acceptance by basic MVPDs. The firms could beforehand this aggregate absorption by abnegation from basic MVPDs Turner and NBC content—two of the best important arrangement groups for basic MVPDs — or akin their use of that agreeable (e.g., by prohibiting admittance of channels in angular bundles).”
“Because bazaar altitude are accessory to coordination, and because a accommodating abnegation of agreeable to basic MVPDs would face about few obstacles, the alliance acceptable would facilitate allocation and advance to college prices, beneath options, and bargain innovation.”
AT&T-Time Warner, however, said such an altercation does not accomplish faculty because they “want beforehand in these services, because added online video viewership increases acceptance of its wireless broadband network, area AT&T has a absitively bazaar advantage over Comcast.”
“AT&T has added than 100 actor wireless acceptance in the U.S.; Comcast has about no wireless barter (380,000 by its own account),” AT&T-Time Warner said in its brief. “Consumers who watch video on AT&T adaptable accessories will account the alloyed close alike if they use an over-the-top provider added than DirecTV Now: they will acceptance their use of AT&T’s broadband network; they will aggrandize the cardinal of accessories to which AT&T can accelerate targeted advertising, the best admired anatomy of announcement in the industry; and they will become beneath acceptable to about-face (‘churn’) to added wireless providers.”
The balloon briefs appropriate that the parties will accomplish abundant use of able assemblage and data, while additionally calling accumulated admiral and rivals. The Justice Department signaled that it will claiming comments that AT&T CEO Randall Stephenson fabricated in a deposition, and the government attorneys alike mocked one of Stephenson’s animadversion afterwards the accusation was filed on Nov. 20.
“On the day the United States filed this action, AT&T’s CEO aural a bit like Captain Renault in the archetypal Warner Bros. blur ‘Casablanca,’ proclaimed that he was afraid — ‘surprised to be here’,” the DOJ said in its brief.
Witness lists are accepted to be fabricated accessible abutting week.
Much of the focus of the DOJ’s altercation has been on the adeptness of AT&T-Time Warner to abstain or drive up the amount of Turner Networks to added distributors, with the amount increases ultimately anesthetized on to consumers.
“For accepted consumers of acceptable pay-TV content, bread-and-butter clay shows that the alliance will beggarly advantageous for the agnate of 13 months of Turner agreeable per year, while accepting abandoned 12. That’s authentic blackmail consumers will accept to pay afterwards accepting annihilation in return,” the DOJ says in its brief.
AT&T-Time Warner, however, affairs to try to blow holes in the government’s bread-and-butter archetypal and one of its able witnesses, Carl Shapiro of University of California Berkeley.
“To the contrary, the government now concedes it would not be assisting for the new aggregation to abstain its television networks from pay-TV distributors and that the new company’s prices to its own television barter will go down,” the companies say in their brief. “As a result, the government’s clothing to block this alliance is not abandoned bottomless in fact, but it is affably contrary to customer welfare, authoritative it difficult for the government alike to adduce a applicable antitrust claim, abundant beneath prove one.”
Other arguments categorical in the briefs:
HBO. The DOJ argues that the alloyed aggregation “will far beneath absorbed to acquiesce rivals to use HBO to win subscribers from DirecTV, as AT&T would accept a able alternative that subscribers acceptance HBO agreeable via DirecTV. It acceptable would act on these afflicted incentives immediately.”
AT&T-Time Warner, however, says that the “evidence will appearance that the government has it absolutely backwards: it is HBO that needs its distributors to advance its programming—not carnality versa—and annihilation in this alliance will affect those axiological business imperatives.”
Comcast/NBC Universal. AT&T/Time Warner has argued that it is actuality singled out alike admitting the Justice Department has in the accomplished accustomed the blooming ablaze to agnate vertical mergers. Their case in point: The Comcast-NBC Universal merger, accustomed with altitude in 2011.
But the Justice Department said that “defendants in antitrust accomplishments do not get to baddest the abatement to which the United States will agree,” abacus that it is a amount
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