AT&T Wins Right to Present 'No Blackout' Offer at Merger Trial

(Bloomberg) -- AT&T Inc. won the right to attack the U.S. lawsuit against its planned takeover of Time Warner Inc. by presenting evidence that it won’t pull channels off the air in contract disputes with rival pay-TV distributors.

With the start of the antitrust trial over the merger less than a week away, U.S. District Judge Richard Leon in Washington on Tuesday denied a request by the Justice Department to prevent AT&T from arguing that its “no blackout” pledge undercuts the government’s case.

That promise is aimed squarely at one of the Justice Department’s key arguments in its lawsuit seeking to block the Time Warner takeover: that AT&T will gain greater leverage over rivals like Dish Network Corp. in content negotiations and be able to raise prices for programming. The case is set to go to trial Monday.

AT&T counters that its offer to distributors not to go dark means it won’t have leverage over distributors. It says Time Warner’s Turner Broadcasting sent all its distributors irrevocable offers to submit disputes over price of Turner programming to binding arbitration and to guarantee continued access to that programming.

The U.S. argued the focus of the trial should be on the underlying merger and that the arbitration offer doesn’t change the structure of the transaction.

The case is U.S. v. AT&T Inc., 17-cv-2511, U.S. District Court, District of Columbia (Washington).

To contact the reporters on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net, Andrew Harris in Washington at aharris16@bloomberg.net.

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, Elizabeth Wollman

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