Comcast Corp. executive Greg Rigdon failed to give a big boost to the Justice Department's antitrust case against AT&T when he testified that the telecom giant wouldn't be likely to force the nation's largest cable-TV company to pay more for "must-have" sports, entertainment, and news if it buys Time Warner Inc, owner of CNN and HBO, for $85 billion.
Rigdon, testifying in the blockbuster case, also said Thursday that Comcast/NBCUniversal would not collude with a merged AT&T/Time Warner to restrict online streamers from viewing Hollywood entertainment, Variety reported from Washington.
Justice Department attorneys called Rigdon to testify, and the Philadelphia executive acknowledged that Comcast had agreed to pay more for Turner channels, owned by Time Warner, in recent negotiations — which will lead to higher cable-TV bills. But Rigdon didn't say how much or whether the rate was greater than inflation.
Central to the government's case is whether AT&T would bully pay-TV operators and streaming rivals if it acquired Time Warner, which owns the Turner networks, including TBS and TNT, in addition to HBO and CNN.
John Hauser, a professor at the Massachusetts Institute of Technology, presented in court Thursday the results of a survey showing that TV distributors would suffer a 12 percent subscriber loss if there was a permanent blackout of the Turner channels and 8 percent losses after a one-month blackout. To avoid subscriber losses, TV distributors will agree to high prices to carry the networks, leading to higher pay-TV bills, the government and critics contend. AT&T and Time Warner attorneys challenged Hauser's estimates.
With Rigdon on the stand, the judge declined government attorneys' request to enter into evidence internal Comcast studies estimating how many TV subscribers it would lose if Time Warner pulled its networks from Xfinity, Variety said.
Rigdon's testimony ended Thursday in a closed session with attorneys and the federal judge to discuss proprietary information.
Rigdon's appearance was the first for a Comcast or NBCUniversal executive in the case that the Justice Department antitrust division brought in November.
Justice antitrust attorneys say AT&T could use Time Warner as a "weapon" against pay-TV competitors by hiking what it charges for Time Warner-owned networks such as TNT and TBS. That could lead to an estimated $465 million in higher pay-TV bills across the nation –- about 45 cents a month for the typical consumer. AT&T disagrees with the estimate.
Though not a defendant, Comcast has a lot at stake in the case. If the government wins, the antitrust attorneys could turn their attention to Comcast — which most resembles a potential AT&T/Time Warner because of its NBCUniversal unit. With an AT&T victory, the government could say that Comcast/NBCUniversal is dangerous for consumers and seek to put restrictions on it.
Comcast/NBCUniversal is considered a "vertically integrated" company that produces entertainment at NBCUniversal that it then distributes to 20 million Xfinity cable subscribers, and sells to pay-TV and streaming competitors. Critics say Comcast could withhold the entertainment from competitors — such as online streamers — or charge excessively for it, hurting rivals. Comcast said it doesn't do that and has no intention to start.
"Comcast should be watching this because if AT&T loses, it could be next in the government's cross hairs," said Salil Mehra, a Temple University law professor and expert on antitrust.
But Comcast could benefit if the government loses. The Philadelphia-based company could find it easier to obtain regulatory approvals for big deals and make another takeover attempt for Fox entertainment assets. Rupert Murdoch has agreed to sell entertainment assets, including its movie studio, cable networks and a big stake in European satellite-TV company Sky, to the Walt Disney Co. for $52 billion.
Murdoch rejected an earlier, possibly higher, offer for the Fox entertainment assets from Comcast, fearing regulatory hurdles, according to reports.
Here are things to know about U.S. v. AT&T Inc.:
Who is Greg Rigdon? He is the executive vice president for content acquisition at Comcast – one of the most powerful posts in the entertainment industry.
He negotiates with entertainment, news and sports cable networks distributed on Comcast's cable systems nationwide. Comcast is the largest cable-TV operator in the United States.
The trial and President Trump. AT&T has said it's a victim of the Trump administration's "selective enforcement" of antitrust laws.
AT&T contends that Trump's real intent is to punish CNN – a Time Warner network bashed by Trump as a purveyor of "fake news" – by blocking the deal. Justice has rejected those claims and says that AT&T must sell DirecTV or other assets before it could acquire Time Warner.
Senior Judge Richard J. Leon denied AT&T's last request for more information on communications between the Trump White House and the Justice Department on AT&T, saying there was no evidence that the case smacked of selective enforcement by the government.
The stakes for Comcast. Later this year, the restrictions that the government placed on Comcast when it acquired NBCUniversal will expire, giving Comcast greater freedom to package and bundle its entertainment. This could include keeping some NBCUniversal entertainment for its exclusive use, critics have said.
If the government blocks the AT&T/Time Warner deal, legal experts say, the Justice Department could seek to extend those conditions — which Comcast opposes.
The judge and the trial. Justice antitrust attorneys filed the suit in U.S. District Court for the District of Columbia on Nov. 20. The trial, which began last week, could last six to eight weeks.