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Income Insights

AT&T Inc: The Blessing of Low Expectations

By Roger S. Conrad on Jul. 19, 2018

Last week, DOJ announced it would file an appeal of US Circuit Court Judge Richard Leon’s ruling that allowed AT&T Inc (NYSE: T) to merge with Time Warner. This week, it made good on the threat, requesting the District of Columbia Circuit Court of Appeals overturn Judge Leon’s decision on the grounds that he “rejected fundamental principles of economics.”

The DOJ also argues for an expedited schedule on the grounds that “time is of the essence,” since AT&T has only agreed to keep its Turner division separate until February 28, 2019. Apparently missing, however, is an allegation of a clear legal error that’s usually necessary for a successful appeal.

That’s already set off a flurry of speculation about just what the DOJ is up to. The D.C. Circuit in the past has often been a go to court for those seeking a liberal view. Trump appointed justices, however, have been screened for their skepticism of regulation.

Even if the DOJ convinces the D.C. court to make what would be a ground-breaking ruling on vertical mergers, it would face a hard test when AT&T appeals to the US Supreme Court. And that’s even before a newly confirmed Justice Kavanaugh cemented a solidly conservative majority that would almost certainly look ill on the courts essentially making new law on vertical mergers.

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