U.S. attorney general urged to consider blocking AT&T deal for Time Warner

WASHINGTON (Reuters) - Seven consumer advocacy groups wrote to Attorney General Jeff Sessions on Thursday to ask him to consider blocking AT&T's plan to buy Time Warner on the grounds that it will lead to higher prices and slow innovation in showing video online.

Common Cause, Consumer Federation of America, Consumers Union, Public Knowledge and other groups echoed other critics of the deal, including some lawmakers, who say that the $85.4 billion deal would give AT&T (T.N), owner of DirecTV, the ability to withhold Time Warner's (TWX.N) content from other outlets and hurt the move to show television shows and movies on the Internet.

The groups argued that after buying Time Warner, owner of HBO and TNT, AT&T would have the incentive to restrict sales of that programming to cable and online channels.

That could hurt DirecTV's rivals as well as AT&T's competitors in providing video online, the letter said.

The groups also worried that the deal would create incentives for AT&T to refrain from showing independent programmers.

The groups said that the deal "poses ... grave dangers to consumers and creators in mature and emerging markets" and urged the government to consider stopping it.

"If you conclude, as appears to us from the available information, that conditions and piecemeal divestitures will not be sufficient, then we hope you will challenge the merger in its entirety," the groups said in their letter to Sessions.

Aside from the Justice Department's antitrust review, the deal is at the center of a controversy over allegations that White House advisers considered using the probe as political leverage. Time Warner owns news station CNN, which President Donald Trump has criticized.

AT&T did not immediately respond to a request for comment. The Justice Department declined comment on the letter.