Creating 'Massive Media-Telecom Behemoth,' Judge Approves AT&T-Time Warner Merger

Creating 'Massive Media-Telecom Behemoth,' Judge Approves AT&T-Time Warner Merger

The Justice Department claimed that AT&T's acquisition of Time Warner would give the No. 1 pay-TV provider increased bargaining leverage over rivals like Dish Network Corp. that pay for Time Warner programming.

An array of public interest and labor groups - many of them far from supporters of Trump - nevertheless supported the Justice Department's attempt to block the deal.

A federal judge has cleared AT&T's planned acquisition of Time Warner, the entertainment company that owns HBO, Turner and Warner Bros.

Among them is T-Mobile US, which is waiting for a government decision on their proposed merger with Sprint Corp. Instead, a rush to consolidate is likely.

A federal judge on Tuesday approved an $85 billion merger between AT&T and Time Warner, ruling against the Trump administration, which had sought to upend the deal.

Judge Richard Leon scheduled a hearing for 4:00 pm (1900 GMT) to announce his decision, which may come around the same time as a written opinion following a seven-week bench trial.

"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", she said in a statement.

The judge in a scathing opinion urged the United States government not to seek a stay of his ruling, saying it would be "manifestly unjust" to do so and not likely to succeed. Major cable, satellite and phone companies are bulking up with purchases of entertainment conglomerates to compete against rivals born on the internet, like Amazon and Google.

"This decision could make it extremely hard for the antitrust agencies to fulfill their congressionally mandated duty to promote competition and prevent mergers that may substantially lessen competition", Mr. Nadler said.

After almost two years, AT&T is on the cusp of completing its acquisition of Time Warner, a deal it struck in a bid to become an entertainment giant that can feed Time Warner programming like HBO and CNN to its 119 million mobile, internet and video customers, and go head-to-head with Netflix Inc. and Amazon.com Inc.

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The White House did not immediately respond to a request for comment.

AT&T will complete its merger with Time Warner by June 20, The Associated Press reported.

In a blunt statement after the ruling was issued, Time Warner pointed the finger at President Trump, implying that he influenced the DOJ's decision to bring the case. He expressed confidence that regulators will see consumer value in the deal and approve the acquisition.

During the trial, they urged the court to block the deal or require the sale of certain businesses as a condition of approval.

Or Leon could reject the merger outright, accepting the government's contention that it would hurt pay-TV consumers and competition in the industry. "I think we'll see now that companies will be much more confident about vertical mergers", he added, referring to deals where a company merges with a supplier.

The mega-merger is a high-stakes bet by AT&T Inc. on the synergy between companies that produce news and entertainment and those that funnel it to consumers - who spend more time watching video on phones and tablets and less time on traditional live TV on a big screen.

Using unusually strong language, he discouraged the Justice Department from asking him to put the ruling on hold while it considers an appeal.

Leon's ruling could shape the government's future competition policy.

Number three wireless carrier T-Mobile, meanwhile, is seeking a tie-up with number four Sprint. The companies' CEOs, AT&T's Randall Stephenson and Jeffrey Bewkes of Time Warner Inc., testified in support of the deal. Post-merger, AT&T rivals like Charter Communications and Cox, which now pay Time Warner for its channels, would suddenly also become AT&T's customers.

The government argued that AT&T would gain outsize market power, jacking up the prices it charges cable providers to carry networks in the Time Warner stable.

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