A main witness for the Justice Department appeared to undercut a key pillar in the government’s case for blocking the AT&T-Time Warner merger: that the combination would increase the risk of blackouts for carriers of the merged company’s popular cable networks. As the landmark case continued to unspool in a Washington, D.C., courtroom, Greg Rigdon, executive vice president of content acquisition for Comcast Cable, testified that his company has “no reason to believe [the deal] would impact my negotiations with Time Warner or HBO,” according to press reports.
These assertions Thursday afternoon by an executive of the nation’s largest cable company with more than 20 million subscribers followed a debate over how many subscribers were likely to bail on their respective pay TV services if Turner networks were blacked out.
MIT professor John Hauser testified that a survey he conducted on behalf of the DOJ found that 12% of subscribers would head for the exits in a permanent blackout and 8% in a one-month stoppage.
But Time Warner attorney Peter Barbur slammed the results of the study, which he said used “priming questions” designed to get the desired response. Hauser acknowledged under cross-examination that he had not used data from actual programming blackouts.
Rigdon, asked on the stand about the projected subscriber-loss figures in the Hauser survey, called the numbers really high. “I would say in one month that seems like a big number,” Rigdon said, referring to the 8% figure.
Judge Richard Leon also appeared skeptical, asking, "You have no way of knowing if the answers on the survey are what they actually believe?" And "What if [respondents are] not sure they have enough information but feel like they have to move forward to get the survey done?"
Earlier in the week, Judge Leon warned attorneys for both sides to speed things up or risk missing the previously extended deadline of June 21 to close the $85 billion deal.
Thursday was the fifth day of the trial, which is expected to last six to eight weeks. It's the first major challenge in years to a merger of so-called vertical integration, a combination of companies that don’t compete directly.
The trial resumes again on Monday. The government is expected to call Coleman Breland, an executive at Turner who was formerly head of distribution there.