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AT&T Begins to Challenge Naysayers

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Jun. 29 2018, Published 2:35 p.m. ET

AT&T tries to defend its Time Warner purchase

The reason AT&T’s (T) deal to acquire Time Warner was held up for more than a year was because the government and other critics claimed it would hurt consumers. The United States Department of Justice, which sued to block AT&T from buying Time Warner, claimed that a combination of the two companies would limit entertainment options and lead to higher prices for television consumers.

But AT&T has recently taken a step that may show that the government and critics were wrong about the merger harming television consumers.

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WatchTV service costs $15 per month

AT&T launched a new streaming video service called WatchTV just days after it finalized its purchase of Time Warner for $85.4 billion. Time Warner is now called WarnerMedia under AT&T.

WatchTV costs $15 per month, which is cheaper than Dish Network’s (DISH) Sling TV, which starts at $20 per month. It’s also cheaper than AT&T’s flagship streaming service DirecTV Now, which starts at $35 per month.

WatchTV subscribers have access to more than 30 live channels, including several popular channels from Viacom (VIA).

WatchTV doesn’t offer sports channels

Like Netflix (NFLX), WatchTV doesn’t include sports, which may explain its low price.

AT&T is banking on services such as WatchTV to fight back against digital newcomers to the media business such as Netflix and Alphabet’s (GOOGL) Google. They’re influencing people to abandon traditional pay-TV subscriptions for slimmer and usually cheaper online video services.

AT&T lost 187,000 cable TV subscribers in the first quarter.

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