Memo Shows That Time Warner Merger Would Protect AT&T's Pay TV

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AT&T and Time Warner are currently in court with the Department of Justice, over AT&T's attempt to purchase Time Warner for $85.4 billion. The Justice Department is looking to block the merger, but AT&T and Time Warner are doing everything it can to make sure it goes through. However, the Justice Department has just brought forth a memo that shows that the merger would allow AT&T's Pay TV service to become a "cash cow" after being in a steady decline for the past few years.

The memo said that the merger would "ensure stability" in its pay TV business. And oddly enough the DOJ is suing to block the acquisition for exactly that reason. The fact that a merged company would be able tor raise prices for pay TV rivals. Time Warner owns a number of networks, which would then be under AT&T's ownership if this merger goes through. That includes TNT, TBS, HBO, CNN and a number of others. AT&T could, in theory, charge competitors more to license these channels, and thus force competitors to charge their customers more. That would lead to AT&T having the cheaper prices, and potentially gaining more customers. And that's where the antitrust aspect of this case comes into play.

The trial has been going on for a couple of weeks already, having started in mid-March. Many expect the trial to end this month, however the end is not certain right now. Many believed before the trial even started, that Justice Department would force AT&T and Time Warner to spin off some of the networks it has, like HBO and CNN, to make the merger a bit more vertical. However, it's not clear if that'll be enough for the merger to be approved. For what it's worth, when the merger was announced in October 2016, both Presidential candidates, Hilary Clinton and Donald Trump had vowed to stop the merger, and that's exactly what's happening right now.

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Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]

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