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Economist tells U.S. judge AT&T-Time Warner deal would harm consumers

Reuters  |  WASHINGTON 

By Diane Bartz

(Reuters) - The called an on Wednesday to testify that allowing to purchase and TV production company would cost consumers hundreds of millions of dollars, as the government wrapped up efforts to convince a to halt the proposed deal.

Carl Shapiro, an at the at Berkeley, said the planned $85.4 billion merger would give AT&T, which owns and streaming television provider DirecTV, leverage to charge more for Time Warner's family of channels, which includes sports content and

It would also give the opportunity to coordinate with Corp , which owns NBCU, to starve companies of content, he said.

is expected to be the government's last witness as it seeks to show that the proposed merger is illegal under because it would raise costs to consumers. The government filed a lawsuit in November and is asking to block the deal.

Following Shapiro, AT&T's lawyers are expected to call their own economist, of

testified that AT&T's ownership of means that it will likely raise rates for content when it negotiates contracts with other cable and companies, and will be more willing to let contracts lapse so could win over irritated subscribers when the rival "goes dark."

Blackouts mattered, he said. "Even though they don't happen very much, that's the key to leverage," he said.

Leon noted that a said in testimony that when its negotiates with rivals that it does not consider a blackout of a rival a way for to win new subscribers.

"That's what they say. Is that correct? Do you have a different understanding?" he asked.

noted that companies tend to function as one entity rather than parts. NBCU's strategy of steering clear of a blackout "would not be in the combined interest of the company. They would be leaving money on the table," he said.

On cross examination, Daniel Petrocelli, a for and Time Warner, pressed on why he did not factor into his an arbitration offer made by that would prevent blackout.

He also questioned other aspects of the government expert's report.

The trial, which began in mid-March in the in Washington, is expected to wrap up this month.

(Reporting by Diane Bartz; editing by and G Crosse)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, April 12 2018. 04:54 IST