AT&T Defends Time Warner Deal

AT&T is planning to acquire Time Warner, and it's already facing skepticism. Critics say the deal will increase prices and reduce consumer choice. But AT&T CEO Randall Stephenson argues that they are trying to reduce prices, increase quality content, and increase innovation, for example, by creating new ad models. He promises to be a "head-to-head, nationwide competitor with the cable ecosystem."

In a press release, Time Warner CEO Jeff Bewkes' quote starts with enthusiasm about shareholders: "This is a great day for Time Warner and its shareholders." He goes on to discuss innovation:

"This is a natural fit between two companies with great legacies of innovation that have shaped the modern media and communications landscape, and my senior management team and I are looking forward to working closely with Randall and our new colleagues as we begin to capture the tremendous opportunities this creates to make our content even more powerful, engaging and valuable for global audiences."

Whether the deal would stifle competition concerns both Republicans and Democrats. Donald Trump said, "As an example of the power structure I'm fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it's too much concentration of power in the hands of too few." And Bernie Sanders tweeted, "The administration should kill the Time Warner/AT&T merger. This deal would mean higher prices and fewer choices for the American people."

Discussion Starters:

  • How well did the AT&T CEO address concerns about the acquisition? What principles of persuasion did he use in the interview?
  • Read Time Warner's press release. How consistently are the two companies speaking about the deal?
  • What's your view? Do you think the acquisition would be bad for consumers as some people fear?