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Judge in AT&T-Time Warner trial slams lawyer for letting key witness see transcripts

Buying Time Warner would give AT&T the tools to undermine emerging competition from online video providers, the Justice Department is arguing.
(Saul Loeb and Stan Honda / AFP/Getty Images)

The judge overseeing the U.S. antitrust trial seeking to block AT&T Inc. from buying Time Warner Inc. issued a stern warning to lawyers for both sides after an attorney for a government witness gave his client transcripts of opening arguments and testimony by another witness before he took the stand.

The witness — Warren Schlichting, president of Dish Network Corp.’s online TV service Sling TV — was called by the Justice Department on Monday in its effort to convince the judge that AT&T’s $85-billion takeover of Time Warner would harm competition from services such as Sling and should be blocked.

Judge Richard Leon said allowing Schlichting to view the materials was in “direct contravention” of court rules. “It was a mess-up by counsel,” he said. “It shouldn’t have happened.”

The judge allowed Schlichting to testify, saying the defense could have “carte blanche” to cross-examine him. He warned that if it happened again, the witness would be barred from testifying and the responsible lawyer could be held in contempt. His decision came after confidential discussions in the morning with lawyers for both sides.

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After Schlichting, the top executive of Turner Broadcasting, John Martin, is slated to be the next witness.

The executives follow testimony from a Cox Communications Inc. executive last week who said she fears that if AT&T acquires Time Warner, it will gain leverage over Cox in programming negotiations. The government is trying to make its case that the deal would give AT&T the power to raise prices on rival pay-TV distributors, which would in turn pass them on to consumers at a cost of more than $400 million a year.

Buying Time Warner, according to the Justice Department, would also give AT&T the tools to undermine emerging competition from online video providers such as Sling TV.

AT&T dismisses the Justice Department’s argument that it’s trying to strangle its rivals. Instead, AT&T says, the deal would benefit consumers by enabling the resulting company to adapt and take on Netflix Inc. and Amazon.com Inc. with additional products.

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The government hasn’t divulged a schedule for the remaining witnesses it plans to call. UC Berkeley economist Carl Shapiro is expected to be a key witness for the Justice Department’s case because he could explain how he came up with the estimate for higher consumer costs resulting from the deal.


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