Feb 16, 2018 - Economy

AT&T and feds fight over proof of political interference

Photo by Roberto Machado Noa/LightRocket via Getty Images

A U.S. district court judge will decide by Tuesday whether AT&T has the right to call the Justice Department's antitrust chief Makan Delrahim to the stand in the March trial over the government's law suit to block the merger with Time Warner.

Why it matters: The decision will determine whether AT&T has grounds to believe that the White House has interfered with the DOJ's merger review, which is supposed to be independent from the president. If the court rules in favor of AT&T, the government would have to hand over all communications between the White House and DOJ.

The backdrop: Rumors of White House interference in the AT&T - Time Warner merger have been swirling since the inauguration of President Trump, who has made his distaste for Time Warner-owned CNN very public. AT&T hopes to discredit the DOJ by proving its suit to block the merger is politically motivated.

AT&T argued Friday that they must bring Delrahim to the witness stand to prove the White House hasn't interfered with the DOJ's decision. Company lawyers said if the government agreed to fork over more documents, they'd remove him from the witness list.

  • AT&T requested records of communications between the Attorney General's office and the White House and the Deputy Attorney General's office and the White House.
  • Lawyers said the DOJ didn't provide two sets of documents AT&T asked for.

The government argues they provided the appropriate documents to prove that there is no political influence in the case and that AT&T shouldn't be granted access to further documents.

  • The feds said they gave AT&T a log of correspondence between the relevant body making the decision around the case, the antitrust devision of the DOJ, and the White House, but that AT&T "didn't find what it was looking for" so it's asking for more.
  • They also say that, with the March 19th trial start date looming, and with roughly "100 thousand" DOJ employees, providing AT&T more documents would delay the case.

The stalemate:

  • AT&T is fighting the DOJ in court because it refuses to settle the case. AT&T could give in to the DOJ's demands to divest one of two properties involved (DirecTV, AT&T's video streaming business, or Turner, the content business that controls CNN).
  • But AT&T says the government's divestiture request could be politically motivated. AT&T argues the government only started demanding divestitures in response to political pressure once President Trump was elected.
  • AT&T wants the merger to go through using "behavioral remedies," or specific promises not to abuse their combined power. AT&T points to such conditions placed on the similarly structured merger of Comcast and NBCUniversal in 2011.
  • Government lawyers say AT&T's claims don't hold water. They say structural requests, like divestitures, are common with vertical mergers, and that AT&T is not being singled out by being asked to divest either DirecTV or Turner.
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