AT&T unable to reach Time Warner settlement deal with DOJ

U.S. Justice Department

AT&T and the U.S. Justice Department were unable to come to terms on antitrust issues with AT&T’s proposed $85 billion merger with Time Warner, which is heading for court after the DOJ sued to block the deal.

The company said discussions with the DOJ over potential remedies fell apart and that the “despite their efforts, [they] have not been able to settle the matter.” AT&T and the DOJ are scheduled to meet in court on March 19.

When AT&T last month confirmed the DOJ lawsuit, it said it would continue to offer solutions that could allow the merger to close.

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But AT&T CEO Randall Stephenson also said that his company would not back down from a court battle with the DOJ.

“We do not intend to settle this matter out of simple expediency because the rule of law is at issue here. Consistence in the application of the law is critical in a free market economy and it’s equally important for preserving confidence in our government, confidence that they will fairly adjudicate the matters brought before them. When the government suddenly, and without any notice or due process, discards decades of legal precedent, businesses large and small are left with no guideposts. Every business combination or significant investment becomes subject to the whim of a regulator. As we’re seeing here, that tends to be a roll of the dice,” said Stephenson.

The DOJ is arguing that AT&T will use its control over Time Warner's valuable and popular networks and programming —which include TBS, TNT, HBO and CNN, along with shows including "Game of Thrones" and NCAA March Madness —to hinder its rivals by making them pay hundreds of millions more for that programming. The department also argues that AT&T would use its market control to slow innovation in video delivery, which would limit choices for American households and in turn cause service costs to rise.

“This merger would greatly harm American consumers. It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy,” said Assistant Attorney General Makan Delrahim in a statement. “AT&T/DirecTV’s combination with Time Warner is unlawful, and absent an adequate remedy that would fully prevent the harms this merger would cause, the only appropriate action for the Department of Justice is to seek an injunction from a federal judge blocking the entire transaction.”