The United States Department of Justice is still open to the idea of settling its dispute with AT&T over the telecom giant’s proposed purchase of entertainment conglomerate Time Warner. “We don’t try to litigate to win, we just want to solve a competitive problem,” the DOJ’s antitrust head Makan Delrahim said Thursday, adding that he’s open to an out-of-court resolution but isn’t expecting it. AT&T previously expressed a similar sentiment, yet the two remain at a standstill, with the second largest wireless carrier in the country still being unwilling to agree to major concessions to have the deal approved as it insists it’s pushing for a vertical merger, i.e. one that doesn’t take out any competition from the market.
The duo recently discussed a settlement in a formal capacity but failed to make any significant progress, Mr. Delrahim said yesterday. While vertical mergers historically faced little opposition from antitrust authorities in the U.S. and AT&T’s case is the first such proposed consolidation that ended up being legally challenged by the government in decades, the DOJ believes a full tie-up with Time Warner would provide the mobile service provider with significant leverage over its distribution rivals that would allow it to increase their licensing costs and either squeeze out unfair fees from them or have them drop Time Warner’s content entirely, thus putting them at a competitive disadvantage to its own services such as DIRECTV.
According to estimates from the DOJ’s expert witnesses, the currently proposed merger would cost consumers over half a billion dollars per year in extra TV bills, a notion which AT&T repeatedly dismissed. The Dallas, Texas-based company is also claiming its proposed remedies are identical to the one the federal government pushed for before approving Comcast’s acquisition of NBCUniversal in 2011 but now finds them insufficient. The DOJ was previously said to have been seeking a divestment of either DIRECTV or Time Warner’s Turner before greenlighting the deal. The testimony part of the trial has been officially concluded yesterday and the first-instance ruling on the matter is expected to be provided in the coming weeks.