AT&T Judge Rips Lawyers After Key Witness Sees Transcripts

(Bloomberg) -- The judge overseeing the U.S. antitrust trial seeking to block AT&T Inc. from buying Time Warner Inc. issued a stern warning to lawyers for both sides after an attorney for a government witness gave his client transcripts of opening arguments and testimony by another witness before he took the stand.

The witness, Warren Schlichting, president of Dish Network Corp.’s Sling TV, an online TV service, was called by the Justice Department Monday in its effort to persuade the judge that AT&T’s $85 billion takeover of Time Warner will harm competition from services such as Sling and should be blocked.

Judge Richard Leon said allowing Schlichting to view the materials was in "direct contravention" of court rules. "It was a mess-up by counsel," he said. "It shouldn’t have happened."

The judge allowed Schlichting to testify, saying the defense could have "carte blanche" to cross-examine him. He warned that if it happened again the witness would be barred from testifying and the responsible lawyer could be held in contempt. His decision came after confidential discussions in the morning with lawyers for both sides.

After Schlichting, the top executive of Turner Broadcasting is slated to be the next witness.

The executives are the most high-profile witnesses yet in the trial and follow testimony from a Cox Communications Inc. executive last week who said she fears that if AT&T acquires Time Warner it will gain leverage over Cox in programming negotiations. The government is trying to make its case that the deal will give AT&T the power to raise prices on rival pay-TV distributors, which will in turn pass them on to consumers at a cost of more than $400 million a year.

Buying Time Warner, according to the Justice Department, will also give AT&T the tools to undermine emerging competition from online video providers like Sling TV.

AT&T dismisses the Justice Department’s argument that it’s trying to strangle its rivals. Instead, it says, the deal would benefit consumers by allowing the resulting company to adapt and take on Netflix Inc. and Inc. with additional products.

The government hasn’t divulged a schedule for the remaining witnesses it plans to call. University of California at Berkeley economist Carl Shapiro is expected to be a key witness for the Justice Department’s case because he’ll explain how he came up with the estimate for higher consumer costs resulting from the deal.

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

©2018 Bloomberg L.P.