News and Analysis
The U.S. Department of Justice has filed a lawsuit attempting to block the $85 billion merger between AT&T and Time Warner, as I predicted it would last January and even in November 2016.

“This merger would greatly harm American consumers,” Makan Delrahim, Justice’s chief of its anti-trust unit, said in a press release. “It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy.”

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Despite the statement, it says here that President Trump’s ongoing war with CNN, which is owned by Time Warner, is at the center of the administration’s concerns regarding the merger.

The president has bashed CNN as delivering ‘fake news,’ and suggested the merger should not be approved in part because the news network would only get more powerful under AT&T.

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AT&T yesterday immediately vowed to fight the Justice Department’s lawsuit in court, suggesting it’s politically motivated.

“We are surprised to be here and candidly are quite troubled by it,” AT&T CEO Randall Stephenson said at press conference following DOJ’s announcement. “We have no intention of backing down.”

However, the time and money involved in fighting the lawsuit could give AT&T pause. The company had hoped to have wrapped up the merger by now, which would enable it to begin using Time Warner’s ample content (HBO, CNN, TNT, TBS etc.) to boost its distribution properties such as DIRECTV, DIRECTV Now, U-verse, and wireless service.

The lawsuit could force AT&T to wait several more months (or more), assuming it wins, which is far from certain. Such a delay could complicate AT&T’s plans for Time Warner and possibly even make it more difficult to execute them.

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— Phillip Swann