WASHINGTON (Reuters) - AT&T Inc’s (T.N) planned $85.4 billion acquisition of Time Warner Inc (TWX.N) will increase innovation and bring “better-priced options” to consumers upset by high cable bills, AT&T Chief Executive Randall Stephenson told lawmakers on Wednesday.
“We want consumers to pay for their content once and watch it any where any time,” he said at a hearing of the Judiciary Committee’s antitrust panel.
Senator Amy Klobuchar, the ranking Democrat on the panel, expressed concern that the deal would create incentives for AT&T to refuse to license Time Warner’s movies and television shows to competitors. She also said AT&T could favor its own shows over independent content.
Time Warner owns HBO, CNN, Cartoon Network and the Warner Bros film studio.
Senator Al Franken, also a Democrat, expressed the same concern and pressed Time Warner CEO Jeffrey Bewkes on whether the new, combined company would raise rates to others who would broadcast its content. “It would not have the incentive nor would it have the ability,” Bewkes responded.
AT&T’s Stephenson agreed: “It would make no sense ... to do that.”
Senator Mike Lee, a Republican who chairs the antitrust panel, said the review by the U.S. Justice Department would be “very fact-intensive.”
“Consumer welfare is maximized by protecting competition, not necessarily by protecting competitors,” Lee said.
The Justice Department will determine whether the deal is legal under antitrust law. If the agency decides to stop a proposed transaction, it must convince a judge to agree.
Stephen has said that the Federal Communications Commission would also review the deal if AT&T decides to assume any of Time Warner’s licenses.
Franken said he wanted to see the FCC review the merger because of their tougher standard.
Senator Richard Blumenthal said he had “serious concerns about this transaction. I have yet to be convinced that the benefits outweigh the risks.”
But he was also concerned that President-elect Donald Trump, whose administration will decide whether to approve the merger, had said during the campaign that it should be blocked.
“What troubles me is that the president-elect has said that his Justice Department will enforce a different standard of law depending” on whether he is angered by news coverage, said Blumenthal, calling the notion “absolutely abhorrent”.
Stephenson said he had not been in touch with Trump’s transition team on the issue and that he expected the Justice Department would review the merger fairly.
Billionaire investor Mark Cuban told the Senate panel that the merger would create another competitor against large companies like Apple Inc (AAPL.O), Google (GOOGL.O), Microsoft Corp (MSFT.O), Amazon.com Inc (AMZN.O) and Facebook Inc (FB.O).
“Delivering content to consumers in this app-driven world is not easy,” he said in written testimony. “Alone, it will be very difficult, if not impossible for either AT&T or Time Warner to compete.”
And more change would be coming, he said: “There’s going to be people cutting the broadband cord.”