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AT&T-Time Warner Deal 'Not Good for the Country'

22 November 2017

US President Donald Trump said today the huge merger planned between AT&T and Time Warner, and now challenged by the antitrust regulators, is "not good for the country".

The Justice Department on Monday sued AT&T arguing that the telecom carrier would use Time Warner's content to force rival pay-TV companies to pay "hundreds of millions of dollars more per year for Time Warner's networks".

"We want to go to court as soon as possible", Petrocelli told CNBC, saying the burden of proof was on the government.

If the case goes to trial, then the final decision would be left to a judge as he/she will decide if the merger between AT&T and Time Warner should go ahead.

Shares of Time Warner have fallen 10 percent since word first leaked in early November that the Justice Department might challenge the AT&T purchase.

The move may be a sign that the Trump administration will look closely at other big mergers.

AT&T head lawyer David McAtee said vertical mergers, between companies on different steps in a supply chain, are routinely approved.

The deal has been a political lightning rod since it was hatched in October 2016.

On the campaign trail previous year, Trump said the deal would give AT&T too much power, and would result in the "concentration of power in the hands of too few".

The White House has denied that Trump has discussed the merger with Attorney General Jeff Sessions, and the chief of the DOJ's antitrust division, Makan Delrahim, said that there was no interference by the White House in the decision to pursue a lawsuit.

The No. 2 USA wireless carrier struck a deal in October 2016 to buy Time Warner, which also owns the premium channel HBO and movie studio Warner Bros, in order to compete with emerging technology companies by bundling video entertainment on its mobile service.

"The theories that are being espoused (in the complaint) are not out on the edge or untested theories".

Aside from Trump and the Justice Department, the deal is also opposed by an array of consumer groups and smaller television networks. He, however, noted that selling CNN to appease the White House wasn't going to be part of the deal.

The Justice Department has not successfully litigated to stop a vertical deal - where the merging companies are not direct competitors, as is the case with AT&T and Time Warner - since the 1970s, when it prevented Ford Motor Co from buying assets from spark-plug maker Autolite.

"People see the DoJ (the Justice Department) under Trump as less predictable (than) they thought", said a trader, who spoke on condition of anonymity to protect business relationships.

AT&T-Time Warner Deal 'Not Good for the Country'