In their first court filing responding to a Justice Department antitrust lawsuit, AT&T and Time Warner fought back against claims that the companies’ proposed merger would stifle competition and hurt consumers.
The DOJ argued in its lawsuit last week that AT&T could use its control over Time Warner’s popular networks, like HBO, CNN and TBS, to force rivals to pay hundreds of millions more per year for distribution rights.
In the Tuesday filing, obtained by NBC, AT&T countered that in the current television age, the proposed merger is a “pro-competitive, pro-consumer response to an intensely competitive and rapidly changing video marketplace.”
AT&T pointed to the billions of dollars tech giants are funneling into video content and contended the merger was needed to complete against leading cable incumbents and services such as Netflix, which plans to spend $17 billion on streaming content over the next few years.
“Apple, Google and Facebook, with billions of users and a combined market capitalization of more than two trillion dollars, are likewise investing billions of dollars in their own video offerings,” attorneys for the companies wrote.
The telecom giant also asserted that the transaction is a ‘classic vertical deal” and does not eliminate any competitors from the marketplace – and noted that the DOJ did not oppose the Comcast and NBCUniversal vertical merger in 2011.
The document highlighted concessions Time Warner’s Turner already offered to distributors contingent on the deal closing, including forbidding Turner programming from going dark during any potential arbitration over licensing terms.
AT&T filed a second motion proposing a trial date of February 20, 2018. The DOJ proposed a start date of May 7, 2018, which would come after the companies’ recently extended merger deadline of April 22.
“These documents offer even more conviction to our belief that [AT&T] is gearing up for a courtroom fight,” Wells Fargo Senior Analyst Jennifer Fritzsche wrote in a note to investors Wednesday. The February start date, she added, would be viewed as favorable as it could help start an “expedited trial.”
