Judge clears AT&T-Time Warner deal, rebuking Trump administration

web_photo_AT&T store_22102016

File photo of the signage for an AT&T store is seen in New York.

File photo of the signage for an AT&T store is seen in New York.

web_photo_AT&T store_22102016

File photo of the signage for an AT&T store is seen in New York.

File photo of the signage for an AT&T store is seen in New York.

WASHINGTON - A US federal judge approved Tuesday the $85-billion merger of wireless and broadband giant AT&T with media-entertainment conglomerate Time Warner, delivering a stinging rebuke to Donald Trump&39;s administration in its first major antitrust court case.

US District Judge Richard Leon said the government had failed to meet its burden of proof that the tie-up between the largest US pay-TV operator and the media entertainment giant would harm competition.

The case had been closely watched as setting a benchmark for other big corporate mergers, especially in the media and communications sector.

Leon said the case fell short on all counts and warned the government against seeking to hold up the deal with an appeal, saying that would cause "irreparable" harm to the two companies whose tie-up has been delayed for a year and a half.

"There would be no irreparable harm to the government (with a delay), only to the companies," Leon told the packed courtroom in an unusual session to announce his opinion.

"The government has taken its best shot and lost."

Leon&39;s 172-page ruling was a total victory for the companies. It said the government failed to back up its three theories of harm to consumers from the mega-merger.

He maintained that the government&39;s claim that pay TV costs would rise from the tie-up was based on "speculative" logic and that its study from an expert witness was contradicted by other evidence from the government.

The deal brings together AT&T&39;s wireless and broadband networks and its DirecTV subscription service with the media assets of Time Warner, which include CNN and other Turner cable channels, Cartoon Network, premium channel HBO and the Warner Bros studios.

- New services, packages -

AT&T and Time Warner argue they need more scale to compete with online rivals like Netflix and Amazon and with Silicon Valley giants like Google, Facebook and Apple, which are expanding in the rapidly evolving sector.

Independent media analyst Alan Wolk said the clear approval opens the door to AT&T offering new kinds of services and packages that can tie into 5G, or fifth-generation wireless networks.

"Imagine AT&T giving free CNN and free HBO to every AT&T wireless subscriber," Wolk said.

Time Warner gets better viewership data to more effectively compete against online platforms like Netflix, which "will make it easier for them to better target ads," Wolk added.

President Donald Trump had previously denounced the AT&T deal, vowing that his administration would block it because it would concentrate corporate power unacceptably.

This fueled speculation that Trump could be retaliating due to critical coverage of his administration from news broadcaster CNN, a Time Warner property.

"Trump&39;s meddling in law enforcement actions, his attacks upon particular companies, and his utter unpredictability have created the kind of legal uncertainty common in &39;banana republics,&39;" said Berin Szoka of the think tank Tech Freedom.

"At least in antitrust law, the courts, not Trump officials, will have the final say on what the law really is. Every business in America is safer today from being strong-armed by a would-be strongman."