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AT&T and Time Warner $85B Merger to Move Forward After DOJ Appeal Denied

Last June, a Federal Judge approved AT&T’s $85.4 Billion acquisition of Time Warner without any conditions. However, the DOJ decided to appeal claiming that the trial court abused its discretion in stating that the merger would not reduce competition and cause an increase in what consumers pay for television.

Since the conclusion of the deal, AT&T has been under scrutiny for raising customer prices despite claiming that the deal would keep consumer prices down. Today, the U.S. Appeals Court rejected the anti-trust challenge claiming the court “did not abuse its discretion” and that the DOJ’s argument that errors were made were “unpersuasive.”

Despite this, AT&T there have been tangible price increases since the deal was announced.

  • AT&T raised the price on DIRECTV NOW by $5 a month on all plans, including those on a grandfathered $35 a month Go Big plan that early users received.
  • They increased their monthly administrative fee to $1.99 a month for the majority of post-paid cell phone subscribers. The $1.23 increase adds ~$800 million in revenue to the company.
  • They launched AT&T WatchTV which includes 37 channels for $15 a month. The service which was heavily promoted as only being viable if the deal was approved comes free to wireless subscribers, but only if they upgrade to the newly launched, but more expensive AT&T Unlimted&More plan.

With the appeal now over, AT&T will now own a wireless service (AT&T), four pay TV service (DIRECTV. AT&T U-Verse, DIRECTV NOW, & AT&T WatchTV), and a bundle of cable channels (HBO, TNT, TBS, CNN, etc.). They will also be launching a streaming service, a likely Netflix-competitor, later this year.

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