AT&T/Time Warner merger will raise TV bills $436 million a year, US says

AT&T's proposed purchase of Time Warner would raise the total amount Americans pay for TV service by $436 million a year, the US Department of Justice alleges in its lawsuit attempting to block the merger. AT&T scoffed at the government's calculations, disputing the methodology and saying that even if the DOJ is correct, the average customer bill would rise by only 45 cents a month.

The DOJ cites calculations by economics professor Carl Shapiro of the University of California at Berkeley, who will be one of the government's expert witnesses at the trial, which starts March 19 at the US District Court for the District of Columbia.  The DOJ didn't say what the average increase for each consumer would be. AT&T's brief said the DOJ's projections amount to an "insubstantial 45-cent monthly increase, all of 0.4 percent per bill, which is where the government currently stakes its case."

A 45-cent monthly increase would add up to $36 million a month if the numbers are based on a nationwide TV subscriber base of about 80 million households. But the increase to customers of non-AT&T providers would be more than that. AT&T has about 24 million of the nation's TV customers via DirecTV and its wireline services. AT&T also disputes the government's contention that it will be able to "drive harder bargains with AT&T's distribution rivals, forcing them to pay higher prices to avoid losing access to Turner programming."