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AT&T’s Stephenson to Senate: Merger Will ‘Disrupt the Current Model’

14 Dec, 2016 By: Doug McPherson

WASHINGTON – AT&T CEO Randall Stephenson told the Senate Judiciary Committee’s antitrust subcommittee that AT&T’s merger with Time Warner would allow consumers to more easily watch paid TV on devices of their choosing.

“Our intent is to disrupt the current model,” Stephenson said. “We want to give customers more control of how they watch their video content, making their video experience seamless as they move from their TVs to their mobile devices. We expect to deliver mobile-optimized content and services, and ad-supported services that shift more costs from consumers to advertisers.”

The comments came as lawmakers and the Department of Justice examine the impact of the proposed deal on competition.

Stephenson used the example of AT&T’s recent launch of DirecTV Now – a paid service that allows viewers to stream TV shows to their mobile devices – as the type of offering that gives viewers greater control over video access.

Entrepreneur Mark Cuban, who also testified before the antitrust subcommittee, shared support for the merger, and said it will help AT&T and Time Warner compete with Silicon Valley.

“We need more companies with the ability to compete with Apple, Google, Microsoft, Amazon, and Facebook,” he said. “Delivering content to consumers in this app driven world is not easy, it is very expensive and difficult … Alone, it will be very difficult, if not impossible for either AT&T or Time Warner to compete with any of the companies I’ve mentioned. Together, it will be still be difficult, but a combined entity at least gives them a chance to battle the dominant players in the marketplace.”

Still, consumer advocates warn that the merger could harm those consumers and competition.

Gene Kimmelman, CEO of the advocacy group Public Knowledge, said in a statement that the merger would allow AT&T to restrict competitors’ access to Time Warner programs. He added that AT&T’s role as an internet service provider lets the company control “a vital input that rival online video distributors need to access to reach customers.”

Regardless, there may be more mergers on the horizon. AT&T’s chief financial officer John Stephens suggested during an investors’ conference last week that AT&T’s acquisition spending spree may ramp up under the Trump administration. 

He said the incoming administration might also be eager to overhaul U.S. corporate tax policy. And those factors could enable AT&T to increase its investments in many ways.

“When you have tax reform that’s been proposed – and whether it’s the House presentation, or the president-elect’s plan, or some mix of that – we believe that it will lead to further investment in the United States, which means further capital spending, which means further jobs here in the United States, and when you put all that together it means further demand for our products,” Stephens said. “So we are very excited about that. We feel very good about that. It’s still early. We’ll see how things play out, but we are very optimistic.”

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