AT&T could raise annual TV bills by $436 million if allowed to merge with Time Warner, the Department of Justice said last week as part of its Friday trial brief held in the run-up to its courtroom clash with the country’s second largest mobile service provider. The figure is based on a number of models ran by economics professor Carl Shapiro of the Berkely university who will also testify at the trial as one of the DOJ’s expert witnesses. The Dallas, Texas-based wireless carrier dismissed the claim as baseless, having said its own projections are pointing to an “insubstantial” increase of 45 cents per a TV bill, or 0.4-percent on average. The DOJ’s attorneys haven’t disclosed how much the government is expecting the per-bill price to raise should the tie-up be approved in its current form.
The redacted transcript of the brief suggests the main arguments of both sides haven’t changed, with AT&T remaining adamant its proposed takeover is vertical in nature and doesn’t remove any competition from the market, being a type of a merger that Washington historically had little issues with approving. Time Warner’s Turner remains the main point of contention, with the DOJ arguing AT&T would be able to leverage the media company’s assets to push for “harder bargains” with rival distributors and increase their licensing costs under the threat of taking away their access entirely, consequently prompting them to raise their own prices. AT&T waved away those allegations as unsubstantiated, having asserted Turner would suffer irreparable damage in the form of lost advertising and licensing profits if it opted for such a move, suggesting it would have no reasons to devalue any assets of its proposed $85.4 billion purchase.
The tensions between AT&T and the DOJ have been increasing in recent months, with a number of reports suggesting the telecom giant will attempt to allege White House involvement in what it deems is an unprecedented decision to block a vertical merger during the trial. President Trump has a highly public and unfriendly relationship with Turner’s CNN to which it often referred to as “fake news.” The trial meant to decide the outcome of the proposed takeover is scheduled to start on March 19 and is expected to last for several weeks.