AT&T’s chief executive, Randall Stephenson, said in court testimony that the company’s proposed merger with Time Warner would allow AT&T to better match up against Facebook, Amazon, Apple, Netflix and Google,
WASHINGTON — AT&T’s chief executive, Randall Stephenson, on Thursday attacked the Justice Department’s lawsuit to block its merger with Time Warner, saying that a combined company would be no different from the tech giants that make and distribute video content.
As the last witness for the defense in the Justice Department’s legal battle against AT&T’s $85.4 billion deal to buy Time Warner, Stephenson portrayed the 140-year-old phone giant as being in an existential crisis and in need of the deal with Time Warner to compete against tech companies.
He called the blockbuster merger a “vision deal” that would allow AT&T to better match up against Facebook, Amazon, Apple, Netflix and Google, or FAANG.
“The FAANG are all focused on premium video,” Stephenson said, comparing the proposed merger to the businesses of tech giants. “All of them are vertically integrated.”
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The Justice Department sued to block the union of AT&T and Time Warner in November, saying it would hurt consumers who would likely see their monthly cable bills increase. The trial is being closely watched as a barometer of how the Trump administration may treat megamergers, and for the implications of the case on antitrust policy and the entertainment landscape.
The trial is expected to wrap up in coming days after rebuttals by the Justice Department and closing statements by both sides. Presiding Judge Richard J. Leon of the U.S. District Court for the District of Columbia is expected to make a decision on the suit as early as the end of May.
In cross-examination of Stephenson, the Justice Department’s lead litigator, Craig Conrath, picked apart the portrayal of AT&T as under siege by tech companies. Conrath said the key difference between AT&T and those companies is that AT&T is in a powerful position as a company that provides broadband access to the internet — a service that Netflix and Amazon don’t offer.
The key disadvantage that AT&T and Time Warner face is their slow start in behavioral advertising and marketing, Stephenson said. Both companies do not collect or analyze the habits of television and web users in the same way that Comcast does with cable subscribers and that Google and Facebook do on their platforms.
Stephenson said Netflix, Amazon, Google and Facebook are all investing in premium video content to collect increasing amounts of data on users who would spend longer times on their sites and visit more often.
Stephenson attacked the Justice Department’s underlying theory that the company would threaten to withhold Time Warner content to raise prices on other cable and satellite distributors. He said that argument “defies logic.”
“The value of a content company is how many people watch the content. Period,” Stephenson said.