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AT&T Is Said to Want Antitrust Official on Witness List for Trial AT&T Is Said to Want Antitrust Official on Witness List for Trial
(about 3 hours later)
WASHINGTON — AT&T is seeking to put the head of the Justice Department’s Antitrust Division on its witness list in a trial over the government’s decision to block the phone giant’s $85 billion merger with Time Warner, according to two people with knowledge of the pretrial activity.WASHINGTON — AT&T is seeking to put the head of the Justice Department’s Antitrust Division on its witness list in a trial over the government’s decision to block the phone giant’s $85 billion merger with Time Warner, according to two people with knowledge of the pretrial activity.
The company is requesting that the antitrust chief, Makan Delrahim, testify in the trial, which is scheduled to begin March 19. The company’s request for the antitrust chief, Makan Delrahim, to testify is highly unusual. By putting Mr. Delrahim on the witness list, AT&T is effectively forcing him to defend his own decision to oppose the blockbuster merger. The trial over the Justice Department’s lawsuit to stop the deal is scheduled to begin on March 19.
AT&T has also asked for internal communications between Mr. Delrahim’s office and Attorney General Jeff Sessions, according to two people with knowledge about company’s demands. As part of that request, AT&T has asked for email, phone and other communications between the White House and officials in the Justice Department, the people said. “I never heard of something like that happening in my time there,” said John M. Newman, an assistant professor of antitrust law at the University of Memphis School of Law and a former trial lawyer for the Justice Department’s Antitrust Division. “It’s a big nasty move to poke a finger at the other side by calling its counsel as a witness.”
The deal would create a media and telecom giant with AT&T’s wireless and satellite television service and Time Warner’s movies and television assets. The deal is expected to transform the media landscape and set up the company to have a powerful grip over how consumers get streaming entertainment over mobile devices. Mr. Delrahim was included in a list of witnesses submitted to the court by AT&T in recent days, according to two people with knowledge about the company’s demands, who asked to remain anonymous because the details were confidential. AT&T has also asked for internal communications between Mr. Delrahim’s office and Attorney General Jeff Sessions, they said. As part of that request, AT&T has also asked for email, phone and other communications between the White House and officials in the Justice Department, the people said.
The Justice Department is suing to block the merger because it believes the combination of telecom and media giants will harm competition and lead to higher prices for consumers. But the case has been clouded by politics. AT&T and Time Warner announced their $85 billion deal in October 2016. If completed, it would create a media and telecom giant with AT&T’s wireless and satellite television service and Time Warner’s movies and television assets. The combination is expected to transform the media landscape and set up the company to have a powerful grip over how consumers get streaming entertainment over mobile devices.
Time Warner owns CNN, and the president has at times taken aim at the news network for its coverage of his administration. During his presidential campaign, he said the merger should be blocked. But the Justice Department sued to block the merger last November. Mr. Delrahim and other officials said the combination of telecom and media giants would harm competition and lead to higher prices for consumers.
The case has also been clouded by politics. Time Warner owns CNN, and President Trump has at times taken aim at the news network for its coverage of his administration. During his 2016 presidential campaign, he said the merger should be blocked.
AT&T has not directly mentioned the potential of political interference by the White House in Mr. Delrahim’s actions against AT&T and Time Warner. But AT&T’s chief executive, Randall L. Stephenson, has publicly questioned the motives of officials at the Justice Department.
Antitrust regulators are required to make decisions independently of the White House. Mr. Delrahim has denied any interference in the decision to block the merger.Antitrust regulators are required to make decisions independently of the White House. Mr. Delrahim has denied any interference in the decision to block the merger.
During the pretrial discovery period, the parties notify the court of requests such as witness lists, documents and interviews. A judge will intervene only when there is a dispute over the demands. The Justice Department has also submitted a list of witnesses, along with other documents from AT&T and Time Warner, said the people. During the pretrial discovery period, the parties notify the court of requests such as witness lists, documents and interviews. A judge will intervene only when there is a dispute over the demands.
AT&T has amassed a considerable army of litigators and more than 100 lobbyists to win its case. Its top litigator, Daniel M. Petrocelli, defended Mr. Trump in a lawsuit involving Trump University. Time Warner has hired Christine A. Varney, the former head of the Justice Department’s Antitrust Division. “We will reserve comment on it for the courtroom,” Daniel M. Petrocelli, lead trial counsel for Time Warner and AT&T, said in a statement on Wednesday, referring to the reports about Mr. Delrahim being put on AT&T’s witness list.
The decision by Mr. Delrahim, a former White House counsel to deny a merger of two companies that do not directly compete was unexpected given that similar deals have been approved. The Department of Justice has argued that the merger of two giant companies that both produce content and distribute those shows will lead to higher prices for consumers. A representative for the Department of Justice declined to comment.
AT&T has claimed, however, that it appeared that Mr. Delrahim had unfairly singled out its deal. As evidence, it pointed to a decision in 2011 by the Department of Justice to approve a similar deal, Comcast’s merger with NBCUniversal. AT&T has amassed a considerable army of litigators and more than 100 lobbyists to win its case. Its top litigator, Mr. Petrocelli, defended Mr. Trump in a lawsuit involving Trump University. Time Warner has hired Christine A. Varney, the former head of the Justice Department’s Antitrust Division.
Mr. Delrahim has insisted that Comcast has a much smaller reach into American homes compared with AT&T’s nationwide wireless and satellite television network. The decision by Mr. Delrahim, a former White House counsel, to deny a merger of two companies that do not directly compete was unexpected given that similar deals have previously been approved. The Justice Department has argued that the merger of two giant companies that both produce content and distribute those shows will lead to higher prices for consumers.
Before he was appointed to the Justice Department, Mr. Delrahim said in an interview with a Canadian broadcaster that he did not see clear problems with the deal. AT&T has claimed that Mr. Delrahim unfairly singled out its deal. The company described the government’s decision as “selective enforcement” and as evidence, it pointed to a 2011 decision by the Justice Department to approve a similar deal, Comcast’s merger with NBCUniversal.
The strategy of putting Mr. Delrahim on the witness stand has its risks. AT&T is expected to also claim Mr. Delrahim has flip-flopped on his views of the deal. Before he was appointed to the Justice Department, Mr. Delrahim said in an interview with a Canadian broadcaster that he did not see clear problems with the deal. The company may present a video of that interview in the trial.
“If AT&T’s strategy is to call Delrahim to testify for the purpose of showing political motivation, it could blow up in their face if the assistant attorney general is a credible witness for the legitimate challenge of the merger,” said Gene Kimmelman, a former senior antitrust official in the Justice Department who has been critical of the merger. “Unless they have a smoking gun, I think Delrahim has a convincing argument.” Mr. Delrahim has said Comcast had a much smaller reach into American homes than AT&T’s nationwide wireless and satellite television network. He has added that Comcast and NBC were allowed to merge with several so-called behavioral conditions that were hard to enforce. Mr. Delrahim has vocally opposed such conditions that constrain a company’s business practices, saying he prefers selling off assets to solve competition concerns.
AT&T’s strategy of putting Mr. Delrahim on the witness stand is risky.
“If AT&T’s strategy is to call Delrahim to testify for the purpose of showing political motivation, it could blow up in their face if the assistant attorney general is a credible witness for the legitimate challenge of the merger,” said Gene Kimmelman, a former senior antitrust official in the Justice Department who has been critical of the deal. “Unless they have a smoking gun, I think Delrahim has a convincing argument.”