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AT&T CEO Says Proposed Merger With Time Warner Would Benefit Everyone

Apr 19, 2018
Originally published on April 21, 2018 1:28 am
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ARI SHAPIRO, HOST:

The U.S. Justice Department's case against AT&T's proposed merger with Time Warner came to a head this afternoon. President Trump opposes the $85 billion deal. He has said the combined company would be too big. It would include the cable news channel CNN. But today was all about Randall Stephenson. The AT&T CEO took the stand to defend the deal.

Our media correspondent David Folkenflik has been monitoring the trial and joins us now. Hi, David.

DAVID FOLKENFLIK, BYLINE: Hey, Ari.

SHAPIRO: What was the main challenge confronting the CEO today?

FOLKENFLIK: Well, he had to convince the judge that this deal wasn't anti-competitive. He made the case. He said the world is changing fast. And it's not the first time he's thought that, but it's changing faster than ever. And one of the things he did was point to competitors, not classic cable providers that might compete with AT&T's DIRECTV or U-verse but with Netflix, with Amazon, with Apple, these huge tech giants that are spending billions of dollars on content that is sort of outmatching what AT&T can do.

SHAPIRO: Did he make an effective case that these companies - Amazon, Apple, Netflix - could be competition with AT&T?

FOLKENFLIK: Oh, I think there's no doubt about it. I think that he's saying this is going to be content that we can't control. It's not being offered through conventional cable or satellite television providers. And therefore he says we've got to be more in the business of having our own content against which to sell advertising. That is, if we don't have content, we're not really in the game. It's only providers in that world.

SHAPIRO: Now, the government has already made its argument. Remind us what their case is, why the Justice Department opposes this deal.

FOLKENFLIK: Well, their case is too big is too big. I mean, this would be enormous - AT&T obviously a telephone, mobile - a giant - also has, as I mentioned, its own satellite TV as well as cable TV offshoots, adding one of the larger entertainment complexes in the country. It also shouldn't be forgotten. Although in court the judge has said it's not relevant, the president has been outspoken against this on the campaign trail and even after he took office.

But setting that aside, the Justice Department has made the unusual case that these two complimentary rather than competing businesses combining, you know, are just too big and will likely squeeze out benefits for consumers even though that's the kind of case Justice Department has not made successfully in about 40 years.

SHAPIRO: People have wondered aloud whether President Trump's vocal opposition to this merger is related to his vocal opposition to CNN. Has that come up in the hearings?

FOLKENFLIK: No, the judge has said that's not going to be germane. And in fact, the Justice Department has said, you know, that hasn't influenced them. And in fact, the queries from AT&T initially that had been originally raised about whether or not they could get documentation of the back-and-forth between Justice Department and the White House have not been allowed into testimony.

SHAPIRO: So right now, what do you think the prospects for this merger are? How's it looking?

FOLKENFLIK: You know, if I were sitting in Randall Stephenson's office late tonight trying to think through what just happened, I would probably feel pretty good. I'd feel a lot better than the start of this case. Certainly the Justice Department lawyers do not seem to have been able to make the case strongly that there was the dire - desire to work over their competitors - the Comcast and Spectrum and others - by saying we're going just jack up our prices in terms of getting our content on our competitors' fears and benefit our own DIRECTV. What I think you're seeing is that they're making a case, and the Justice Department's had a hard time rebutting it.

SHAPIRO: All right, NPR's David Folkenflik, thanks a lot.

FOLKENFLIK: You bet. Transcript provided by NPR, Copyright NPR.