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Published: Wed, June 13, 2018
Economy | By Melissa Porter

AT&T to close Time Warner purchase by June 20: attorney

AT&T to close Time Warner purchase by June 20: attorney

U.S. District Judge Richard Leon announced in court Tuesday his decision in the biggest antitrust trial in years.

"This decision from Judge Leon will have broad ramifications for the tech, telecommunications and media sector for decades to come", Daniel Ives, the chief strategy officer at GBH Insights, told Business Insider in an email before the decision was handed down.

In a blow to the Justice Department, AT&T's planned acquisition of Time Warner Inc received a nod from a federal judge on Tuesday without any conditions, opening the door for companies such as Comcast Corp, and Verizon Communications Inc to pursue deals to buy creators of media content. In February, Rep. Elijah E. Cummings, the ranking member of the House Committee on Oversight and Government Reform, and Rep. Gerald E. Connolly, the ranking member of the Subcommittee on Government Operations, sent a letter to Attorney General Jeff Sessions asking for documents and emails between the Justice Department and the White House about the decision to sue AT&T and Time Warner.

Asked about the decision, he said, "Obviously we don't agree".

The government argued during the trial that if AT&T were to own Time Warner, it could violate antitrust law by using its market power to get higher prices from TV distributors.

During the trial, the judge heard from dozens of witnesses, including AT&T CEO Randall Stephenson and Time Warner CEO Jeffrey Bewkes. He said the merger "would unlawfully raise prices for cable-TV subscribers and harm online innovation". The "drop dead" deadline for the merger to be completed is June 21.

The ruling is a stinging defeat for the Justice Department. The ruling comes one day after the repeal of net neutrality, meaning that AT&T now has more freedom to prioritize the delivery of select content on its network.

Those comments and his repeated criticism of CNN, which is owned by Time Warner's unit Turner Broadcasting, raised speculation that Trump had pushed Delrahim and the Justice Department to block the deal.

The industry is now turning its eyes to another potential megamerger - the fight between Comcast and Disney to acquire 21st Century Fox.

It's also worth noting that President Trump has been publicly opposed to the deal since he was on the campaign trail. The government's star witness was Carl Shapiro, an economist at the University of California, who used an economic model to predict that consumer cable bills could rise by $500 million annually in aggregate by 2021.

The government has also argued that the newly rolled back net neutrality rules would no longer protect AT&T from, say, throttling Netflix if it didn't purchase and distribute Time Warner content. The companies rejected both options.

AT&T's wooing of Time Warner has been politically complicated from the outset.

In a recent court filing, Redstone said her long-term plan was to create a combined company, which would unite media assets including CBS" broadcast networks, Showtime, MTV, Comedy Central and Nickelodeon, and then sell it. Halford, from OCC added, "All I know is that this will be a blockbuster summer for media mergers!'

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