AT&T Chairman and CEO Randall Stephenson said Friday it makes no sense for the government to oppose the telecommunications giant’s $85 billion buyout of Time Warner on the grounds that content distributors and content creators under the same umbrella would be anti-competitive.
He said major technology firms such as Netflix and Amazon are allowed to do the same thing.
“Reality is, the biggest distributor of content out there is totally vertically integrated. This happens to be something called Netflix. But they create original content; they aggregate original content; and they distribute original content. They have 100 million subscribers,” Stephenson said on CNBC. “Look at Amazon. They’re doing the exact same thing. Amazon Studios, creating, aggregating, distributing; Google, YouTube, Hulu, this thing is prolific.”
AT&T has long-maintained that buying Time Warner is what’s called a vertical merger, meaning AT&T’s mobile network, satellite TV service DirecTV and high-speed internet solutions don’t directly compete with any of Time Warner’s businesses.
AT&T is preparing to face off in court next month against the Justice Department, which in November filed a lawsuit to block the deal. The DOJ has argued the merger combining Time Warner’s content-generating properties including HBO, CNN, Turner Broadcasting System and Warner Bros. studio would give AT&T the ability and incentive to raise prices that it charges cable television, satellite and streaming video rivals for Time Warner content.
The company is in litigation with hearings and depositions going on, said Stephenson, who appeared on “Squawk Box” in an interview from Pebble Beach, California, site of the AT&T Pro-Am golf tournament. He said the judge set to preside over the March 19 trial has committed to a quick proceeding.
Stephenson has been a supporter of Donald Trump during the campaign and as president. However, then-candidate Trump attacked the deal, which was announced in October 2016.
One day after last year’s DOJ suit, Trump reiterated his feeling that the deal would not be good for the country because it might lead to higher prices for consumers. Trump has certainly made no secret of his disdain for Time Warner’s CNN, which he has repeatedly called “fake news.”
On Thursday, four House Democrats wrote the Justice Department to request documents related to the agency’s suit to block the merger. “We are deeply concerned by reports of inappropriate interference by the White House,” said the letter signed by Reps. Jerrold Nadler, Elijah Cummings, David Cicilline and Gerald Connolly.
On AT&T’s earnings conference call last month, Stephenson said, “With 50 years of legal precedent, it’s the type of business combination that the government has consistently approved with appropriate conditions.” He added that closing the Time Warner deal remains a top priority.