September 26, 2018 / 11:39 PM / 3 months ago

Nine state attorneys general back AT&T in Time Warner appeal

WASHINGTON (Reuters) - A group of nine state attorneys general on Wednesday backed AT&T Inc (T.N) as the Justice Department asks a federal appeals court to reverse approval of the company’s $85.4 billion acquisition of Time Warner Inc.

FILE PHOTO: Smartphone with AT&T logo is seen in front of displayed Time Warner logo in this picture illustration taken June 13, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

It “is rare for the federal government to pursue an antitrust case involving major, national companies without any state joining the effort,” the nine state officials said in a court filing, noting that no states have filed briefs supporting the Justice Department’s appeal.

“It is notable that the district court - after a six-week trial, during which it heard numerous witnesses and reviewed thousands of pages of exhibits - found the federal government’s case to be without merit. That determination validates the States’ decision and is entitled to substantial deference,” the brief said.

The nine attorneys general are from Alabama, Georgia, Kentucky, Louisiana, New Mexico, Oklahoma, South Carolina, Utah and Wisconsin.

The government is appealing U.S. District Judge Richard Leon’s ruling in June that the acquisition of Time Warner could proceed. The government argued the deal would lead to higher prices for consumers and was illegal under antitrust law.

AT&T has said it would manage Time Warner’s Turner cable television networks as part of a separate business unit until February 2019 or the conclusion of the government’s appeal.

“In the crucible of litigation, DOJ’s claims were exposed as both narrow and fragile,” AT&T company argued in court documents filed last week.

The merger, announced in October 2016 and closed on June 14, was opposed by President Donald Trump. The merged company includes CNN, a frequent target of Trump’s ire.

In August, the Justice Department said Leon had failed to take into account how companies negotiate with each other and seek to maximize profits in considering the Justice Department’s arguments about how the deal would decrease competition.

The core of the Justice Department’s concern about the deal is that AT&T, which owns DirecTV, would use its ownership of Time Warner’s content to make pay TV rivals pay more, thus raising their costs and forcing them to charge consumers more.

Oral arguments have not yet been scheduled by U.S. Court ofAppeals for the District of Columbia.

Reporting by David Shepardson; Editing by Leslie Adler

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