DOJ And AT&T Trade Barbs As Trial Date Looms

AT&T-Time Warner
AT&T/Time Warner

The Department of Justice and AT&T traded flowery language in pre-trial briefs filed Friday while outlining their positions ahead of their March 19 court showdown over whether the U.S. government can block AT&T’s attempt to acquire Time Warner for $85 billion.

The filings came a day after some former DOJ officials in their own court filing expressed concern over President Donald Trump’s influence over the agency’s move to sue, as retaliation for negative coverage by Time Warner-owned cable news network CNN.

The government today in its filing dinged some of AT&T’s arguments in favor of a merger, referring to them as “the Star Wars defense” — that the DOJ’s objections are “from a long time ago in a galaxy far, far away. Not so.”

Settlement talks between the government and AT&T failed in December, setting up the showdown. At issue is the vertical deal that had sailed through many agencies’ review process and was thought to be days away from a DOJ stamp of approval. But in the lawsuit filed November 20, the DOJ said the merger would raise prices for rival distributors and also pay-TV subscribers, while hampering the growth of online video.

In its pre-trial brief (read it here) today, AT&T said the DOJ’s case — which hinges partly on the theory that the merger will force competitors to pay hundreds of millions of dollars more per year for the right to distribute its raft of networks — “like a Persian cat with its fur shaved, is alarmingly pale and thin.”

Execs at AT&T have publicly questioned the timeline of DOJ’s interference. The suit was filed after talks with regulators who said AT&T could have an easier time if it shed CNN or other large assets as a condition of their approval. AT&T boss Randall Stephenson has said he has no plans to part with CNN.

Among the former DOJers who filed Thursday’s brief about being wary of political interference in the case were Preet Bharara, the former U.S. Attorney for the Southern District of New York, and former U.S. Attorney General John Dean, who served prison time for his role in the Watergate scandal that ended in the resignation of President Richard Nixon.

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