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Judge Indicates Shutdown Won’t Delay AT&T-Time Warner Antitrust Case

Ted Johnson

WASHINGTON — A federal judge told Justice Department lawyers that he would not be inclined to delay a pending antitrust case against AT&T and Time Warner in the event of a government shutdown.

U.S. District Judge Richard Leon cited the urgency of the case, set to go to a trial on March 19.

“We’ve been in this situation before,” he told attorneys for the government and the companies. “It’s unfortunate we are in that situation.” He said, “hopefully, clearer heads will prevail” and a shutdown will be averted.

Just outside the court, Makan Delrahim, the chief of the antitrust division, told reporters afterward that they may still be obligated to request a stay in the case, leaving it up to the judge to decide. The Justice Department has a contingency plan for a government shutdown.

The Justice Department sued AT&T and Time Warner in November, arguing that their planned merger would harm competition because the combined company would have the incentive to raise prices on must-have networks, such as Time Warner’s Turner channels. Those include TBS, CNN, and TNT.

AT&T and Time Warner have argued that their transaction is just the type of vertical merger that has passed DOJ scrutiny for decades.

They got a boost in a discovery dispute on Friday. They are seeking pricing data that third parties filed in previous Justice Department reviews of major media transactions. In response to subpoenas, the third parties have not turned over all of the data, and some have indicated that they no longer have it, said Dan Petrocelli, the lead attorney for AT&T and Time Warner. The Justice Department, however, said it has declined to turn over the data because it wants to protect the third-party sources.

Petrocelli indicated that AT&T and Time Warner see the data as important because it would show the impact of pricing from three prior vertical mergers. He noted that a “key contention” made by the government is that the prices of Turner networks will rise if the AT&T and Time Warner merger goes through.

“That evidence is sitting in the government’s files and we are trying to get our hands on it,” Petrocelli said.

Leon, though, said he would give the DOJ the weekend to decide what to do. Otherwise, he said he would issue an order on Monday for the Justice Department to return the data to the third parties, so it could then be subpoenaed by AT&T and Time Warner.

“Ever play a game of hot potato?” Leon asked one of the DOJ attorneys. “It sounds like that is the game that is going on here.”

The third parties include Dish Network, but others were not immediately disclosed.

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