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AT&T economist argues Time Warner merger is good for consumers

Reuters  |  WASHINGTON 

By Diane Bartz

WASHINGTON (Reuters) - AT&T's proposed merger with Inc would save consumers money because the marriage of a pay-TV provider with a and TV giant would create a more efficient company, an testifying for said in court on Thursday

Dennis Carlton, from the University of Chicago, sought to rebut testimony on Wednesday from an for the government, of the at Berkeley, who said the $84.5 billion deal would cost American consumers some $286 annually in higher prices.

The government filed a lawsuit in November to block the deal, citing antitrust concerns. U.S. will order the deal stopped if he determines it would raise prices for consumers or threaten the development of

Shapiro had argued that the proposed deal would spur AT&T, which owns DirecTV, to charge its rivals more for content, in particular the Turner family of and sports shows.

He also said the combined company would have an incentive to decline to offer content to cheaper services.

Carlton attacked the assumptions in Shapiro's testimony and used newer data to show that by his tally, the deal would provide a net benefit to consumers of 52 cents per subscriber a month.

"There is an efficiency from vertical integration," argued Carlton. The proposed transaction is considered a vertical deal since AT&T, which owns satellite company DirecTV, is buying a content supplier,

Carlton said Shapiro underestimated how many people were dropping pay TV altogether and overestimated how many people would leave their pay TV provider if they lost access to Turner's channels.

On cross-examination, sought unsuccessfully to push Carlton to concede that a previous vertical deal, Comcast's purchase of NBCU, led to more expensive TV shows and movies when NBCU negotiated new contracts with other pay TV companies.

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

In a sign of the high stakes of the trial, the of the Justice Department's antitrust division, Makan Delrahim, sat at the government counsel's table on Thursday, prompting a reaction from Leon, who said: "My goodness gracious," when Delrahim introduced himself.

(Reporting by Diane Bartz; Additional reporting by David Shepardson; Editing by Peter Cooney)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, April 13 2018. 08:43 IST