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U.S. worried AT&T and Time Warner would hike costs for media rivals

Reuters  |  WASHINGTON 

By David Shepardson

(Reuters) - U.S. antitrust regulators believe that AT&Inc's proposed of Inc would raise costs for rival entertainment distributors and stifle innovation, Department of Justice official told on Thursday.

Allaying those concerns is the rationale for the Justice Department's demand that AT&sell assets in order for the deal to be approved, said the official, speaking on condition of anonymity.

The Justice Department wants AT&to sell its DirecTV unit or sell Warner's Turner Broadcasting unit, which includes company CNN, sources told on Wednesday.

AT&has signalled it would not agree to sell DirecTV, which it acquired for $49 billion in 2015, leaving CNN and other cable TV assets as the main sticking point in negotiations between the Justice Department and AT&

The antitrust regulator is worried the combined company could make it harder for rivals to deliver content to consumers using new technologies, the official said. AT&has said it wants to disrupt "entrenched pay TV models."

The Justice Department's desire for asset sales has raised concerns about political influence on the $85.4 billion deal, given U.S. President Donald Trump's frequent criticism of CNN. As candidate, Trump vowed to block the deal shortly after it was announced in October 2016, but has not addressed the issue publicly as president.

The head of the Justice Department's antitrust division, Makan Delrahim, said in statement late on Thursday that he has "never been instructed by the White House" on the AT&deal.

Raj Shah, White House spokesman, said in separate statement that Trump "did not speak with the Attorney General about this matter, and no White House official was authorized speak with the Department of Justice on this matter."


AT&chief executive Randall Stephenson defended the merger New York City media conference on Thursday, and said he did not want to sell CNN.

The company has opposed divesting assets and has told the government it is willing to fight in court to win approval, sources said on Wednesday.

The deal is opposed by an array of rivals and consumer groups worried that it would give the combined company too much power. Opponents are pushing for conditions that would limit AT&T's ability to charge media rivals higher prices to carry content.

Shares of were down slightly in afternoon trading $88.35. AT&shares rose 2 percent to $34.09.

(Reporting by David Shepardson; Editing by Bill Rigby)

(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: Fri, November 10 2017. 00:10 IST