Reach Out and Touch Someone

The U.S. Department of Justice is suing to block AT&T’s $85 billion deal to buy Time Warner, reports CNBC.

And here’s how a press release from the Department of Justice explained its action:

The United States Department of Justice today filed a civil antitrust lawsuit to block AT&T/DirecTV’s proposed acquisition of Time Warner Inc. The $108 billion acquisition would substantially lessen competition, resulting in higher prices and less innovation for millions of Americans. The combination of AT&T/DirecTV’s vast video distribution infrastructure and Time Warner’s popular television programming would be one of the largest mergers in American history.  Time Warner’s network offerings include TBS, TNT, CNN, Cartoon Network, HBO and Cinemax, and its programming includes Game of Thrones, NCAA’s March Madness, and substantial numbers of MLB and NBA regular season and playoff games.   According to the complaint, which was filed in the United States District Court for the District of Columbia, the combined company would use its control over Time Warner’s valuable and highly popular networks to hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for the right to distribute those networks.  The combined company would also use its increased power to slow the industry’s transition to new and exciting video distribution models that provide greater choice for consumers, resulting in fewer innovative offerings and higher bills for American families.
– via www.justice.gov

Bloomberg reports that “a defiant Randall Stephenson told antitrust enforcers that AT&T would see them in court…”

The CEO [Stephenson] briefly addressed what he called “the elephant in the room” — whether the lawsuit had anything to do with Trump’s very public and intense dislike of CNN. “Frankly, I don’t know,” he said. “But nobody should be surprised that the question keeps coming up, because we’ve witnessed such an abrupt change in the application of antitrust law here.”
– via Bloomberg.com

Recode’s lead explained the rationale behind DOJ’s trying to stop the deal this way: “The Comcast-NBCUniversal deal was bad. So the AT&T-Time Warner deal is worse — because it’s even bigger.”

The argument goes that “if it’s worrisome for a regional distributor to buy a big content company, it’s an even worse one for a distributor with a national footprint.”

Looks like this one’s headed to the courthouse.