February 20, 2018 / 7:13 PM / 24 days ago

Judge denies AT&T access to White House correspondence on Time Warner deal

WASHINGTON (Reuters) - A judge on Tuesday denied AT&T Inc’s (T.N) request to see White House communications that might shed light on whether U.S. President Donald Trump pressured the Department of Justice to try to block the wireless carrier’s purchase of Time Warner Inc (TWX.N).

An AT&T logo is pictured in Pasadena, California, U.S., January 24, 2018. REUTERS/Mario Anzuoni

The decision is a potential setback to AT&T’s plan to argue in an upcoming trial that the department’s decision to oppose the acquisition was politically motivated, perhaps spurred on by Trump’s public criticism of the deal and his frequent attacks on Time Warner’s CNN.

The trial to decide the fate of the $85 billion deal, which the companies agreed to in October 2016, is set to begin on March 19.

AT&T lawyers said in court on Friday that the Time Warner deal may have been singled out for enforcement, citing as evidence statements by Trump as a candidate and as president that the deal was bad for consumers and the country.

But U.S. District Judge Richard Leon was not convinced. “Defendants have fallen far short of establishing that this enforcement action was selective,” Leon wrote in a seven-page ruling denying AT&T’s access to the government communications, which might have bolstered its case.

“We respect the judge’s decision and look forward to the upcoming trial,” said Dan Petrocelli, lead trial attorney for both AT&T and Time Warner.

The communications consisted of potentially thousands of emails and other correspondence.

“We are pleased with and respect today’s decision, which will permit the parties and court to focus on the case at hand,” Justice Department spokeswoman Kerri Kupec said in an email statement. “This case has always been about protecting consumers from competitive harms.”

Trump criticized the deal as a candidate in late 2016, saying it would concentrate too much media power in the hands of one owner, and once again in November, saying it would raise prices. He has also frequently attacked Time Warner’s CNN for what he sees as negative coverage of his campaign and administration.

    The Justice Department sued in November to try and stop AT&T, which owns DirecTV, from buying movie and TV show maker Time Warner, arguing that the deal would mean higher prices for rival cable and online video distributors and for consumers.

    It is unclear how much the judge’s decision will impact the case. Antitrust cases are judged legal or illegal depending on whether prices go up or innovation is lost because of a deal.

    In a pre-trial hearing last week, AT&T’s Petrocelli derided the government’s case as “weak,” saying that their economists had determined the price of AT&T’s DirecTV could go down and that there could be a small increase to non-DirecTV consumers.

    The Justice Department’s Craig Conrath disagreed, saying the deal would cause “hundreds of millions of dollars of damage.”

    AT&T and Time Warner shares both fell slightly.

    Reporting by Diane Bartz and David Shepardson; writing by Bill Rigby; editing by Leslie Adler and Grant McCool

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