Analysts Say Turner Arbitration Offer Blunts Government's Objections to AT&T-TW Deal

Analysts say AT&T’s declaration that it would offer distributors arbitration when Turner carriage deals expire—and its promise of no blackouts for seven years—if its acquisition of Time Warner goes through answers one of the government's biggest objections to the deal. AT&T disclosed the offer in response to the Justice Department’s suit looking to block the merger on antitrust grounds.  MoffettNathanson Research analysts Craig Moffett and Michael Nathanson called AT&T's arbitration and no-blackout gambit clever. “In a single commitment, AT&T has gotten to the very heart of the DOJ’s case,” the analysts say. "This commitment captures the very essence of the so-called 'non-exclusivity provisions' of the erstwhile Program Access Rules about which we have written so frequently in the past. “And by making the commitment irrevocable, they have alleviated the take-it-or-leave-it nature of the decision that would otherwise have faced Judge Leon,” Moffett and Nathanson say. “This both reduces pressure on Judge Leon – he no longer has to consider the deal as if it has no behavioral remedies whatsoever, as would have been the case absent this commitment – and increases it, as it now becomes much harder to reject the deal when AT&T is committing to exactly the same behavioral remedy to which Comcast committed (and for the same amount of time).”