An AT&T store in Manhattan. The telecom giant and Time Warner have proposed an $85.4 billion merger.
An AT&T store in Manhattan. The telecom giant and Time Warner have proposed an $85.4 billion merger.

WASHINGTON (Diya TV) — AT&T and Time Warner executives were summoned to Capitol Hill Wednesday to defend their upcoming $85 billion merger.

Arguments of representatives from both companies hinged on the idea that offering more innovative services over the internet is a way to better compete with cable companies.

At a hearing on Capitol Hill on Wednesday that was being closely watched for how mega-mergers will be viewed in the coming Trump administration, members of a Senate Judiciary subcommittee that oversees regulatory agencies that decide on mergers said the deal merited tough scrutiny. The chief executives of AT&T and Time Warner were grilled at the hearing about a range of issues related to the deal.

During his opening testimony, AT&T chief executive Randall Stephenson said that the intent of the merger “is to disrupt the existing pay TV model.” This, however, is something that’s already been done — HBO Now, a product of HBO, delivers a library of the station’s content to anyone with an internet connection without requiring they pay for a TV subscription. Time Warner did that all on its own without needing to be part of an internet service provider.

“We want to ensure that competition thrives in this critical market and we don’t stifle innovation or deter the emergence of cutting-edge technologies that customers demand,” said Senator Charles E. Grassley, Republican of Iowa, who heads the full Judiciary Committee.

Senator David Perdue, Republican of Georgia, said the deal would combine companies that did not directly compete against one another. “The consumer is benefited from the aggregation,” he said. “That is called capitalism.”

Here’s what Time Warner CEO Jeff Bewkes had to say at today’s hearing:

“We do not own any cable, satellite, telephone, broadband, or distribution business. As a video content company our success depends on achieving the broadest distribution of our content. Great content is not enough. You need to deliver great consumer experiences and that’s what joining with AT&T will allow us to do.”

Time Warner no longer views the streaming service Netflix as a “complimentary” service, but finally as a real and equal competitor. Back in 2013, Bewkes brushed Netflix aside. Wednesday he said something very different:

“We’re proud of what Time Warner has accomplished but today we’re competing for consumers attention not just with other TV networks but with everyone from Netflix and Amazon to YouTube and Facebook.”