AT&T announced in late 2016 that it was acquiring Time Warner for $85 billion. The deal has been going through regulators, and in November, the Department of Justice filed a lawsuit to block the merger. AT&T's CEO has been on the defensive as of late, defending the acquisition. Stephenson stated, when talking with CNBC this week, that the acquisition of Time Warner would allow the company to better compete with the likes of Hulu, Google, Netflix, Amazon and others. Explaining that they also create and distribute content. Which is the reason why the Department of Justice is looking to block this merger.
The lawsuit that the Justice Department filed in November, is due to start on March 19th. Obviously, Stephenson was unable to talk to much about the lawsuit, since it is ongoing. But the Justice Department believes that if the merger were to go through, AT&T would be able to charge its cable, satellite and streaming video rivals more for including HBO, CNN, TBS and Warner Bros. Studio content on its platforms. While AT&T argues that it would not do that, it is a real concern for the Justice Department. And it's likely that AT&T may have to spin off some of those content-generating properties ahead of the completion of the acquisition.
Despite this, AT&T's CEO has said that the company is ready to go to court and fight this lawsuit with the Department of Justice, and the Judge has agreed to a speedy trial. This purchase has been ongoing for quite some time already, and AT&T is hopeful that it can get the acquisition finalized in the next few months. It's a bit interesting that the Department of Justice is taking AT&T to court over buying Time Warner when it approved Comcast buying NBC back in 2011. And now there is also talk of CBS looking to acquire Viacom. So it looks like there will be more consolidation in the content-generation industry right now. The Justice Department's issues here are real, and could be an issue for the consumer, as it would cost more to get these channels and content that would be under AT&T's ownership. We should find out more next month, once the trial begins.