AT&T-Time Warner Merger: Department Of Justice Says TV Costs Will Go Up

A Department of Justice anti-trust lawsuit to block the proposed merger of AT&T and Time Warner revealed that the deal would likely lead to more expensive television subscriptions.

According to a trial brief filed by the federal government last week, AT&T’s acquisition of Time Warner’s content production arm could cost Americans a total of $436 million per year more for cable and satellite TV plans.

"If TV-program distributor AT&T acquires TV-program producer Time Warner, American consumers will end up paying hundreds of millions of dollars more than they do now to watch their favorite programs on TV," the Department of Justice wrote in its brief, which was obtained by International Business Times.

"In short, the transaction violates Section 7 of the Clayton Act, because its effect 'may be substantially to lessen competition.' Prices for current services will go up and development of emerging competition will slow down."

The DOJ estimates come from Carl Shapiro, an economics professor at University of California at Berkeley. Shapiro is set to serve as one of the government’s expert witnesses during the trial, which is set to begin March 19 at the U.S. District Court for the District of Columbia.

AT&T refuted the government’s estimations. The telecommunications giant claimed that even if the calculations provided by the federal government were correct, it would mean that the average customer would only see a $0.45 increase in their monthly bill.

Even without the merger, AT&T has increased the cost consumers pay for its services. Earlier this year, the company raised the monthly subscription fee for its satellite TV service DirecTV, which AT&T acquired in 2013.

The proposed $85 billion merger of AT&T and Time Warner—the owners and operators of networks like CNN, TBS, TNT and HBO—was originally proposed in late 2016. Under President Donald Trump, the DOJ has been encouraged to prevent the consolidation of television assets. President Trump has famously feuded with Time Warner property CNN over some of its reporting.