AT&T antitrust trial set to begin
On Monday, AT&T squares off against the federal government in a trial that could shape how you get – and how much you pay for – streaming TV and movies.
AT&T says it needs to gobble up Time Warner if it’s to have a chance against the likes of Amazon, Netflix and Google in the rapidly evolving world of video entertainment.
The Justice Department’s antitrust lawyers say that if AT&T and Time Warner are allowed to combine, consumers will end up paying more to watch their favorite shows, whether on a TV screen, smartphone or tablet.
“On one hand, the government is saying this is the Old World and AT&T Time Warner is saying this is the New World,” said Larry Downes, senior industry and innovation fellow at Georgetown University. “They’re arguing completely different views of how the content industries look right now, let alone in the future.”
In October 2016, AT&T offered to buy Time Warner for $86 billion. Dallas-based AT&T Inc. provides wireless, broadband and DirecTV satellite services via phone and TV. New York-headquartered Time Warner owns the HBO, TNT, TBS and CNN networks and sports programing including Major League Baseball’s playoffs and the NCAA’s March Madness basketball tournament.
The government sued to block the deal this past November.
Almost 60 percent of Americans still get TV primarily from traditional cable services, according to a Pew Research Center report. But that is starkly divided by age. About 61 percent of people age 18 to 29 primarily use streaming services – compared with 10 percent of people age 50 to 64.
AT&T says the merger is necessary to compete as more people use streaming services such as Netflix, Amazon and others. It denies the government’s assertion that the merger will limit choice and lead to higher prices for consumers.