Richard Dodge Dr.

Apr 17, 2018  
Media Attorney

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"What I'm saying is it will be in AT&T's interest to use this leverage." Leon replied, "That's an assumption. You don't have an independent basis." Leon also asked Shapiro about the general loss of subscribers the cable industry has experienced recently, and noted that many traditional pay-TV subscribers are older. "If (those subscribers) are 60 years or older, they're dying off ... that might account for this decline nationwide," he said. Shapiro is a world-renowned economist who regularly consults for and testifies in merger cases. He was also the chief economist in the Justice Department's antitrust division from 1995 to1996, and again in 2009 to 2011. He was a member of the White House's Council of Economic Advisers from 2011 to 2012. AT&T and Time Warner's lead attorney, Daniel Petrocelli, focused during cross examination on what he saw as the missing pieces of Shapiro's analysis and report. Petrocelli pointed out that Shapiro did not consider real world negotiations or current, longer term contracts currently in place that prevent certain price increases for years to come. One of those large contracts that runs for the next few years would negate a vast majority of the net increase, Petrocelli argued. Petrocelli also said Shapiro was using outdated profit margin data from AT&T as part of his harm analysis, and that more recent profit margin data available to him would have shown a 40 percent drop in the harm calculations though Shapiro said he didn't find the most recent profit margin data representative enough.

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