Justice Department Sues To Block AT&T's Merger With Time Warner : The Two-Way DOJ's case against the merger argues that the companies would control so much of both what people watch and how they watch it, that it could mean higher prices for both consumers and competitors.
NPR logo

Justice Department Sues To Block AT&T's Merger With Time Warner

  • Download
  • <iframe src="https://www.npr.org/player/embed/565476244/565599427" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Justice Department Sues To Block AT&T's Merger With Time Warner

Justice Department Sues To Block AT&T's Merger With Time Warner

  • Download
  • <iframe src="https://www.npr.org/player/embed/565476244/565599427" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

STEVE INSKEEP, HOST:

OK, so the Justice Department is suing to stop AT&T from buying Time Warner. It's the first antitrust case of the Trump administration. And one of the companies is of special interest to the president. NPR's Alina Selyukh reports.

ALINA SELYUKH, BYLINE: If there's one company that's been around the block on antitrust, it's AT&T. In fact, AT&T itself is a product of a landmark anti-monopoly case in the '80s when the Justice Department broke up the Bell System.

The telecom giant's biggest merger moments in recent history include, first, a failed attempt to acquire rival T-Mobile in 2011 and the successful purchase of the satellite company DirecTV in 2015. And the man who brought both of those bids to the DOJ for review is CEO Randall Stephenson.

(SOUNDBITE OF ARCHIVED RECORDING)

RANDALL STEPHENSON: I've done a lot of deals in my career, but I've never done one where we have disagreed with the Department of Justice so much on even the most basic of facts.

SELYUKH: That's Stephenson talking about AT&T's proposal to buy the media company Time Warner for $85 billion. The DOJ is asking a federal court to block this deal.

(SOUNDBITE OF ARCHIVED RECORDING)

STEPHENSON: 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. But here we are. The government has filed a lawsuit.

SELYUKH: And it's unusual because it's a media company plus a telecom company, which is known as a vertical merger. It does not get rid of a direct competitor, which is normally the big antitrust red flag. But the DOJ says the two companies together would control too much of both what we watch and how we watch it - news network CNN, popular channels like HBO, plus a movie studio, plus Internet and pay TV. The government says this will raise prices for consumers and hurt competitors.

In theory, AT&T could appease the government by getting rid of a major element in the deal, like DirecTV or Turner Broadcasting. AT&T says it won't. And like many things these days, the issue is also political.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT DONALD TRUMP: CNN, fake.

Or CNN, which is so bad and so pathetic and their ratings are going down.

We don't want fake news.

Very faked.

SELYUKH: President Trump's dislike of CNN is well known, and CNN is part of the merger. This week, Justice Department officials said Trump's opinion of CNN had no impact on the antitrust review. But AT&T is quite likely to bring up Trump's remarks in court where the government has to make the case against the merger. In that, the DOJ will have the support of many consumer advocates who have fought to stop the deal. Alina Selyukh, NPR News.

(SOUNDBITE OF OCHRE'S "BLUE HOURS")

Copyright © 2017 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

About