US: Economist tells judge AT&T-Time Warner deal would harm consumers

The US Justice Department called an economist on Wednesday to testify that allowing AT&T to purchase movie and TV production company Time Warner would cost consumers hundreds of millions of dollars, as the government wrapped up efforts to convince a federal judge to halt the proposed deal.

Carl Shapiro, an economics professor at the University of California at Berkeley, said the planned $85.4 billion merger would give AT&T, which owns satellite and streaming television provider DirecTV, leverage to charge more for Time Warner’s Turner family of channels, which includes sports content and CNN.

It would also give AT&T the opportunity to coordinate with Comcast Corp , which owns NBCU, to starve cheaper online video companies of content, he said.

Shapiro is expected to be the government’s last witness as it seeks to show that the proposed merger is illegal under antitrust law because it would raise pay TV costs to consumers. The government filed a lawsuit in November and is asking US District Court Judge Richard Leon to block the deal.

Following Shapiro, AT&T’s lawyers are expected to call their own economist, Dennis Carlton of the University of Chicago.

Shapiro testified that AT&T’s ownership of DirecTV means that it will likely raise rates for content when it negotiates contracts with other cable and satellite companies, and will be more willing to let contracts lapse so DirecTV could win over irritated subscribers when the rival “goes dark.”

Full Content: Variety

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