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AT&T-Time Warner Trial: Testimony Ends, Closing Arguments Set for Monday

WASHINGTON — Testimony in the AT&T-Time Warner trial wrapped up on Thursday, with the marathon antitrust case concluding on Monday with closing arguments.

Attorneys for both sides shook hands with each other after Judge Richard Leon praised the legal teams for their preparations. “Both sides deserve a lot of beers at a minimum.”

The Justice Department claims that AT&T will gain increased leverage in its merger with Time Warner, leading to higher carriage fees for distribution rivals and ultimately higher prices for consumers.

There was a last-minute dispute over the DOJ’s efforts to admit into evidence comments that AT&T and DirecTV made in filings with the FCC over other mergers and rule-making proceedings. Craig Conrath, the lead counsel for the DOJ, said that the documents show that prior comments that the companies have made are “inconsistent” with what some of the executives said during the trial.

In their antitrust complaint, the DOJ quoted a statement that AT&T made in one FCC filing. The company, the DOJ said, recognized that distributors that control popular programming “have the incentive and ability to use (and indeed have used whenever and wherever they can) that control as a weapon to hinder competition.”

Daniel Petrocelli, the lead counsel for AT&T-Time Warner, objected to the effort to admit the documents, calling it an “inexcusable document dump in the last-minute of the trial” and a “manifest injustice.” He said that the Justice Department already tried to admit one of the documents during its cross-examination of AT&T CEO Randall Stephenson, but were unable to establish a foundation.

Leon refused to allow the DOJ to use parts of the documents in their closing arguments, and indicated that it would take at least some days longer to sort out the dispute and rule on their admissibility. He said that the DOJ was making a “dump on the court” of documents and wanted the government to pare down its request.

Makan Delrahim, the Justice Department’s antitrust chief, spoke to reporters afterward and credited both sides for their work on the case, but also said, “I never would bring a case I don’t think I could win.”

He also responded to a Vanity Fair report that Petrocelli called him the weekend before the trial was discussed and the subject of a settlement was broached. Delrahim told reporters that Petrocelli did call and told him, “I just wanted to make sure there is an open line in case there is an attempt to settle.” Delrahim indicated that the conversation did not go much further.

The final witness in the case was Carl Shapiro, the economic expert called by the Justice Department.

On Tuesday, Petrocelli questioned him on one part of his analysis, showing that Suddenlink suffered a significant decline in pay-TV subscribers after it dropped Viacom’s channels. Shapiro has pointed to those figures to show that a similar loss of the Turner channels from AT&T’s rivals would have a harmful effect on their businesses.

AT&T-Time Warner’s experts countered that the Suddenlink subscriber loss can be attributed to industry trends, not to the Viacom channel blackout.

To bolster that argument, Petrocelli pressed Shapiro on why he excluded data on pay-TV subscriber loss from December, 2016, a month when the declines were much more significant than previous months. But on Thursday, Shapiro said that the data was excluded because the figures from Dish Network looked “very peculiar” and didn’t reflect that of other distributors.

Petrocelli questioned Shapiro on why he didn’t bring up that anomaly in the Dish Network figures during Tuesday’s cross examination, rather than on Thursday. Shapiro said that he did not recall it until he reviewed documents from the case over the past two days.

“I thought I did pretty well, but that did not stick out in my memory,” Shapiro said.

Shapiro said that he still stood by his opinion that the merger would lessen competition.

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