AT&T aced its response to the Justice Department’s lawsuit seeking to block its $85 billion merger with Time Warner, an influential media research firm wrote in a report on Wednesday.
The telecom giant’s offer to resolve disputes in arbitration and its promise not to pull programming from partners for seven years strike at the very heart of the government’s action, MoffettNathanson, said in the report.
“In a single commitment, AT&T has gotten to the very heart of the DOJ’s case,” the firm said of the telecom’s two-part pledge in response to the Justice Department’s suit to block the merger.
The first part of the pledge is to offer “baseball style” arbitration to any distributor of content from Time Warner’s Turner division who considers the content unfairly priced.
The second part forbids Turner from “going dark” on any distributor during an arbitration process.
The pledge “so effectively addresses the risk of foreclosure to existing competitors,” MoffettNathanson wrote, “that one might reasonably argue that, well, there is nothing left to argue about.”
That pledge was mailed to content partners of Time Warner’s Turner Broadcasting on Monday, AT&T Chief Executive Randall Stephenson said during a talk at the Economic Club of New York on Wednesday.
The Justice Department has been arguing that the proposed $85 billion merger, if completed, would allow AT&T to unfairly raise the price its distribution competitors pay for Turner content.
Then, should those rivals choose to walk away, the Justice Department further claimed that AT&T would receive “offsetting benefits” — sign-ups to its satellite broadcaster, DirecTV.