AT&T, Justice on a collision course

Two titans - the U.S. Department of Justice and telecommunications giant AT&T - are locked in a high-stakes showdown to decide who controls some of the nation's most popular television channels.

The Justice Department sued to block AT&T's planned $85 billion purchase of Time Warner, the New York media company that owns HBO, CNN, TNT, TBS, Cartoon Network and Hollywood's largest movie and TV studio, Warner Bros.

The dispute - a rare standoff in an antitrust case - will be decided by a federal judge after a trial that begins Monday in Washington, D.C., barring a last-minute settlement.

The government alleges that AT&T, which already owns the nation's largest pay-TV provider, DirecTV, would use its added clout to bully others, freeze out new entrants in the TV industry and increase rates for consumers.

The Dallas phone company scoffs at such concerns, saying the prices for TV service should go down - not up - if AT&T wins its prize.

The trial's outcome will go far beyond who produces the next Batman movie. Experts say that if AT&T prevails, the trend of media consolidation probably will accelerate.

A loss by AT&T could chill the market for blockbuster media mergers, others claim.

The case also could help shape how traditional television is incorporated into mobile phone offerings. AT&T wants to use CNN, HBO and other networks as incentives to keep customers on their mobile phones.

The company also has said it could produce bigger profits by weaving advertising messages relevant to consumers into content streamed on phones.

'This is an important case in the fast-evolving industry of video distribution,” said Douglas Melamed, a Stanford Law School professor. 'But these are difficult cases, and that's why we don't see too many of them.”