If you are here in the room, raise your hand and we will get you a microphone. If you are listening on the thenrence, just press star one. If you are listening or watching on the web classed webcast, click the ask a question but very with us is randall stephenson, the chairman and ceo of at t, david mcafee, at t general counsel, and a partner and our lead trial counsel for at t and time warner. Randall . Thank you and good evening. I appreciate everybody coming on short notice. What you are going to hear it are comments from our legal team. I want to make a few points. Obviously, we are surprised to be here. Candidly, i am a bit troubled. Jeff and i entered into this deal with decades of clear legal president demonstrating how this merger would be evaluated. When we announced this deal, the best legal minds in this country agreed that this transaction would be approved since our company do not compete. But, here we are. The government has filed a it stretches the very reach of antitrust laws beyond the breaking point. All of this is in an effort to stop this combination. This comes at a time when the communication and Media Industries are undergoing radical change. Massive largescale Internet Companies with market caps in the hundreds of billions of dollars are creating tons of original content and are distributing it directly to the consumer. Disrupting both industries, the media and communication industries. It is being done at a level and paste that most of us could not conceive of five years ago. For example, netflix. They distribute their content over 100 million customers. Amazon distribute its content to its prime members that is estimated to be in excess of 60 million. Google and facebook reach and distribute content to literally billions of customers. The government contends that at t, with 25 million tv , and turner, with a singledigit share of all media watched, will have on loss a lot unlawful market power. This defies logic and is unprecedented. I have done a lot of deals in my career, but ive never done one for we have disagreed with the department of justice so much when even the most on even the most basic of facts. Despite our disagreements, we have offered concrete and substantial solutions. As we had to court, we will continue to offer solution that will allow this transaction to close. It cannot be lost that combining the best these companies will create tangible consumer benefits and every day we spent litigating this deal is a day we are wasting on bringing those benefits to customers. We do not intend to settle this matter out of simple expediency. The rule of law is an issue here. Applicationin the of the law is critical in a free market economy. It is equally important for preserving confidence in our government. Confidence that they will fairly adjudicate the matters brought before them. In the government suddenly and without notice for any due the government suddenly and without notice or discardsrocess as we are seeing here, that tends to be a roll the dice. Ofhave no intention proposing a solution that is beyond what the rule of law ared require, and if there legitimate concerns, there are plenty of solutions within the dojedent as well as in the s own guidelines. We will continue to propose those types of solutions to the government. Before i hand this over to the legal teams, i do want to address the elephant in the room. There has been a lot of reporting and speculation on whether this is really about cnn , and frankly, i do not know. Nobody should be surprised if the question keeps coming up. We witnessed such an abrupt change in the application of antitrust law here. The bottom line is, we cannot and we will not be party to any agreement that would even give the perception of compromising the First Amendment protections of the press. Any agreement that results in us forfeiting control of cnn, whether directly or indirectly, is a nonstarter. We believe quite strongly that of at t assets or time warner assets is not required by the law. We have no intention of backing down from the governments lawsuit. Were in this to win, and acid original compromise that does not violate our principles, we expect to do just that. I will turn it over to david. Just to underscore Randalls Point on rule of law, i should stress that the last time the department of justice tried a vertical merger case was in the Carter Administration and they lost that case. Before that, you have to go back to the Nixon Administration to find the last time a court has blocked a vertical merger. In the nearly 50 years since then, mergers like ours have been approved again and again because they benefit consumers without removing any competitors from the marketplace. That is the legal president upon which the parties rely when we entered into this transaction. Under that president , we see no reason for this deal to be treated differently. For more on the dojs lawsuit i turned it over to dan come our lead counsel. Dan, our lead counsel. Todays suit to block this merger represents a serious and struggling departure from decades of legal president and antitrust guidelines. The good news is, and our system does note, the doj have the final word. It is the court who will settle this issue and it will do so based on the facts, the laws, and the evidence. , themerger case like this doj has the burden of proof. It has to prove that this merger will harm competition. It has to prove that this merger will harm consumers. It is a burden that they have , andet in a half a century it is one that they cannot and will not beat here. Just to give you some context, i have been representing at t and throughout the dojs review of this merger transaction over the past year. I have personally sat through days and days of sworn testimony by Senior Executives from both companies who have explained to the doj in great detail every aspect of this merger, including how the combined company will be more efficient, how the company will be better able to compete, and most importantly, how the combined company will be able to offer exciting new video content and other benefits to consumers. The record of evidence before the doj could not be more clear and convincing that there is no harm to competition and there is no harm to consumers. That is exactly what you would expect from a merger like this, because this is a classic vertical merger. Thatning of two companies do not compete with each other. Content, at tns distributes content. Under basic principles of law and economics, combining these two noncompeting, Complementary Companies should pose no antitrust problems. Before he was nominated to lead the antitrust division, macon del ray team can you please play the tape. This is more what we would call a vertical merger. The content with distribution rather than with two competitors merging. I anticipate that the sec will have little if any role, it shouldnt be just to hear the size of it and the fact that is media, i think it will get a lot of attention. However, i do not see this as a major antitrust problem. And he was right. There is no major antitrust problem. There is no antitrust problem. Nothing has changed since mr. Delrahim gave those remarks. This merger will not eliminate a single competitor, the tv bill will not go up, and the combined tnt,ny will not keep cnn, hbo, or any other network to itself. Simply put, the theories in the dojs complaints filed an hour proof and have no make no sense in the real business world. We are confident that the law and the facts will prevail and that this merger will be allowed to proceed. With that, we would be glad to take questions. Drew fitzgerald of wall street journal. Two questions very quickly. You have any present bestat the president has been critical of president has been critical of coverage by cnn, we do not know what was said by whom to whom. Those are issues that have a way of sorting themselves out in the course of public litigation, regardless of any event, this case will be decided on the merits by a federal judge and the government will have a burden of proof. They will have to prove harm, they will be able to do it, and we are confident that this merger is going to go forward. Up, how just follow much, in terms of your defense, would you be looking at the potential for white house about the with doj perception of cnn, about the criticism of the coverage, how much of that is going to play into what you seek in your discovery phase . To be clear, we do not have to mount a defense. It is the government who has the burden of proof. As i said, it is a burden they have not met in half a century. They are going to have to come forward with real proof that somehow, despite longstanding principles of law and economics, somehow this transaction harms competition, harms consumers. They are not going to be able to do that. In terms of some of these other collateral issues, they have a way of coming out. If theres is any proof, im sure it will emerge and it wont vote well for the government if it does. We are not dependent on that at all. When did you get the sense that there was going to be insurmountable hurdles . You never know if the government is going to file a lawsuit until governor the government files lawsuit. We have offered concrete Solutions Throughout this process, not because we believe theres any harm at all, to the contrary, we believe strongly there is no harm whatsoever. We are pragmatic. If there are solutions we can offer consistent with the law, we are here to do that. And we did that. It only became insurmountable when the department of justice decided to file lawsuit. Will question from the conference call. With the New York Times. Along those lines, can you talk a little bit about randall, you said this was an abrupt change in antitrust law. Were you getting different kinds of signals from the doj before the arrival of making dollaryen . And when you folks were talking about how things have a way of coming out, of course, the burden of proof is on the doj. Will you press for some sort of discovery on communications between the white house and the doj and the attorney general . Or do you have a plan for that . About whenuestion is was this an abrupt change . I will take that first question. I will you take the second half of it. This has been going on, this investigation, we are closing in on 13 months. This is very unique to have an investigation go this long. Recently, it felt like it was a delegate path. I cant go to details in terms of the negotiations. , thevid mentioned earlier filing of the lawsuit was kind of the first indication that we were at an impasse. Hopefully not a lawsuit is filed continue having those discussions and see if there was a place we do come to a conclusion that would address their concerns, and there are legitimate concerns. We are where we are. To reiterate, we do not have to prove why they decided to pursue this case. Emerge that it was pursued for some improper purges purpose, thats not going to help the doj. We just have to see what develops in the course of the case. Any other questions . Talk about where you think is talking about charges to the competition . If you were to win in court, can you say 100 that hbo will cost more further distributing services . At t wont have preferential treatment of the network . Is a key point, because what you just alluded to, we believe is pure fiction. Think about what the department is alleging. That somehow the, nation of these two companies creates an abundance of illegal market power where none existed before. Think about where you live at home you might live, inspect your video options at home. Your dominant provider homes your local cable company. They were a monopoly for so long and they are still the dominant Cable Provider in terms of video, broadband, same thing. Your wireless was, all highly competitive. The content later, time warner operates an extremely competitive markets. Some of the combination of these two things would cause harm rather than good strains credibility to us. They are essentially arguing that we would create market power where there was no market power before, that would allow us to charge more consumers. We believe is entirely fictional. Evidence points against this and rational market thought on this, when you consider age feel is priced at 14. 99, amazon gives. 99 it to prime customers at no additional charge. The idea that there is somehow, marketo is owned dynamics would not even allow for higher pricing even if you were to choose to do that. I think weve seen by at ts the past, the objective was to move the content to mobile platforms and broadest reach and platforms. Directv, wequiring had a product called directv now. At 35 a month. You push things to mobile platforms, you innovate and broaden distribution prices. Our objective with time warner and to take that content and broaden distribution, not to define and limit distributional. Those have the opposite on pricing as with the government is alleging. About what youlk are willing to offer to the Justice Department that they werent willing to accept . You said you were willing to make concessions. What are those . We dont comment on negotiations. But the point we want to make is this is an area of the law that is very well developed. There are very few areas that are as well developed as this one. Different solutions have been employed by the department of justice not just because they make sense, because the departmental guidelines require them to consider them. In this case, the point we want we offer those types of solutions, for whatever reason, they werent sufficient. Bridge,the conference washington post. Im wondering if you can respond to a portion of dojs critique of the criticisms of the comcast deal, over the same concerns over this merger. Im happy to answer that. Those are quotes taken completely out of context. Lets remember what nbc you comcast was. This was a deal involving a major big for broadcast network,trong Regional Sport Networks dominant positions the local markets, in terms of video platforms. Dominant positions in broadband less era which was much competitive in 2009, 2010, 2011. Those factors are wildly different in our case. Theres much more competition, overthetop video is thriving, we want to be part of it. Comcast is not a big for broadcast network. He doesnt have that kind of broadcast reach. We dont have the cut of market power in local markets in terms of distribution. In every way i can imagine it, the picture is different today than it was then. Having said that, what we argued comcast,u contracts we argued for the Precise Solutions logistics was just explaining a minute ago that are established by law. No one argued over directv that that deal should be blocked. No one argued for a lawsuit to be filed. Instead, was argued back then was reasonable conditions consistent with division guidelines, consistent with the law, consistent with the sort of solutions we offer throughout this proceeding. Question, financial times. I was wondering about the timeline you are seeing. What do you expect and how long is this going to take . What are the next steps . At what point does it become a situation where you feel you need to cut your losses . Today doj filed a lawsuit and they now have the obligation to stand ready for trial. Because we dont, and we are going to ask the court for the. Arliest possible date this is not a case thats going to drag on for months and months. This is a case where we are prepared to go to trial as soon as possible, and hopefully that will happen as quickly as 60 days. If we have our way with it. Would be hardpressed now if they filed this lawsuit to be telling the court that they are not related to go to trial in this case. We expect them to be ready, because we are. I said in my opening comments, we are going into this to win. In terms of thinking about cutting losses, thats not in our vocabulary. We havegood case a very good case and we intend to win. Terry jeffries from bloomberg. Thanks for taking your questions. Does this doj approach to video content distribution is a competitive concern make at t less inclined to pursue joint ventures or any kind of future ventures with content companies on mobile . I would suggest this lawsuit has the whole world questioning what they will, can, and cannot do. It throws a huge degree of to anybody contemplate joint ventures, anybody contemplating m a. Its one of the key concerns about this, take suddenly, without any notice and just upturn 50 years of precedent on a transaction like this that had nothing but a freezing effect on commerce in general. Hink that is a significant that is the significance of this lawsuit. We thank everyone for joining us , and thank you again. We have this related story from a bit earlier on the hill. Announcedan ajit pai the agency will want to roll back obama era Net Neutrality rules that require Internet Service providers to treat all web traffic equally. Ofblasted the role heavyhanded utility style religion of the internet opposed proposed by jenna by democrats. We would abandon this failed returns to the longstanding consensus that served customers well. Airing our companion network, mostn2, we are showing the recent open meeting of the fcc commissioners. You can see the entire meeting online at cspan. Org. On cspan, former Vice President joe biden and Ohio Governor john kasich is that deal of research and in the trump area partisanship in the trump era. To some degree, the politics of the day is a manifestation of the politics that have been run for a long time. You were on the committee and you saw how raucous and how they were. We went through an impeachment and then we went through the republican revolution and we saw jim wright be driven out and foley be driven out. We saw the republicans when the house for the first time in 40 years. Democrats said no, you never won, were going to just buy you. Its really a pox on both houses. You were right about the guy that yelled at the president you like, the next day, he put out a fundraising letter to raise money off of it. Itself is breaking down because of his politics. That discussion takes place of the university of delaware. See the entire program tonight starting at 8 00 eastern. Angst giving on cspan, here are some of the highlights. The Liberty Medal ceremony honoring senator john mccain at the National Constitution center in philadelphia. In 1 00 a. M. , former secretary of state john kerry received a Lifetime Achievement award at the edward r Kennedy Instit