Appeals court hears arguments against AT&T-Time Warner deal

A three-judge appeals court panel on Thursday questioned the Justice Department’s challenge to a lower court approva𒊎l🌄’s of AT&T’s $85.4 billion acquisition of Time Warner.

“Where is the clear error?” US Judge Judith Rogers asked Justice Department atto🔴rney Mike Murray, who called the lower court’s approval of the deal “myop♏ic.”

“You have to show that ther𓂃e’s a harm to competition,” Judge David Sentelle said at another point. “Remember where the burdens are,” he added later.

Much of the argument at 🅰the US Court of Appeals for the District of Columbia delved into whether a lower 𓆏court judge, US District Judge Richard Leon, properly treated economic models of the merger’s impact on future prices for pay-TV customers.

The core of the Justice Department’s concern has been that AT&T, which owns DirecTV, would use ownerಌship of Time Warner’s content, such as CNN and HBO’s “Game of Thrones,” to make pay-TV rivals pay more, thus forcing them to charge consumers more.

The deal was significant for two other reasons. First, President Trump, who has famously tangled with T🍸ime Warner’s CNN, has vociferously opposed the deal. Second, it is a rare instance 🍷of the government seeking to stop a merger of a distributor and a supplier.

Much of the argument focused on how AT&T, which owns DirecTV, would use the threat of withholding Time Warner’s Turner content, including CNN, in licensing disputes with rival pay-TV companies. The government had argued that the threat of a blackout, withholding the content, would force the smaller ൲companies to pay more, thus raising prices for consumers.

AT&T lawyer Peter ܫKeisler cast doubt on this economic model but faced questions over an arbitration offer that AT&T made to smaller pay-TV companies, pledging that it would not black out Time Warner’s Turner content for seven years. “Of course, we will honor it,” he said.

The Justice Department’s Murray said the offer was “too little, too late.🥀” He said the smaller pay-TV companies worried that it was inadequate to pr🌳otect them.

The gove♊rnment is asking for the 🍸lower court case to be reversed and remanded.

The merger, which was announced in October 2016, closed on June 14 shortly after Leon ruled the deal was legal under anti♌trust law.

AT&T, the No. 2 U.S. wireless carriꦗer by subscribers, agreed in June to manage Time Warner’s Turner networks separately from DirecTV, including setting prices and managing personnel, until Febr💧uary 2019 or the conclusion of the government’s appeal.

The deal was seen as a turning point for a media industry that has been upended by companies like Netflix and Google, which produc🍰e content and sell it online directly to consumers, without requiring a pricey cable subscription.