AT&T Bid For Time Warner : US Department Of Justice Creates Roadblock
The U.S. Department of Justice on Monday sued to block AT&T's $85.4 billion takeover of TV and movie giant Time Warner Inc.
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The government's lawsuit claims the merger would put AT&T in a position to force TV rivals to pay more for video content.
The suit also suggests the deal would let AT&T restrain the development of new video streaming businesses. AT&T's CEO Randall Stephenson responded, saying the government's lawsuit discarded decades of legal precedent.
Randall Stephenson, CEO, AT&T says, "When we announced this deal, the best legal minds in the country agreed that this transaction would be approved since our companies don't even compete with each other."
The second-largest U.S. wireless carrier struck a deal in October 2016 to buy Time Warner, parent company of premium cable channel HBO, news network CNN and the Warner Bros. movie studio, among other properties. The merger would allow the combined company to bundle video entertainment on the mobile service.
Unlike a merger between two telecom companies, which might combine cell towers and broadband service centers, this deal would involve the pipes - AT&T - buying the content - Time Warner's entertainment engine. President Donald Trump, a frequent critic of CNN, slammed the proposed merger last year on the campaign trail.
Randall says, "There's been a lot of reporting and speculation whether this is all about CNN. And frankly, I don't know. But nobody should be surprised that the question keeps coming up. But the bottom line is that we cannot and we will not be party to any agreement that would even give the perception of compromising the First Amendment protections of the press."
The deal is also opposed by an array of consumer groups and smaller television networks on the grounds it would give AT&T too much power over the content it would distribute.
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