Public service by americas Cable Television companies and is brought to you today by your cable or satellite provider. Peter this week if the communicators we want to introduce you to bob quinn, the Senior Vice President for the at t corporation. Mr. Quinn, that is a lot of title. What does it entail . Mr. Quinn at at t that would entail i run the regulatory shop for the state and federal operations. We do business in 50 states. We do business with state commissions across the country. I also run the Public Policy organization and i run both the state and federal legislative efforts that we have in the united states. We also have international interest. When we acquired direct tv, we acquired a kind of ongoing said like video business in latin america based on recent investments. Become very large wireless providers in mexico. We have our operations in europe where on an enterprise acis it serves for the most part its corporate customers and they do business all across the world. We have fairly significant interests in europe and asia as well as latin america and mexico. Would you be quickly called a lobbyist . I do not qualify under the standards that are in place in congress. We are over capitol hill every day. Peter before we introduce take shepherdson from writers, what is one of the biggest issues that at t is working on . We have so many issues. I think from a corporate perspective, the most important is the tax reform agenda. I think as a company, we play a pretty significant role over it is this roundtable. I think Corporate Tax reform is a critical business issue for the company. I think in terms of getting the economy going, in terms of creating jobs, there is nothing that would be more significant than finding a way to lower our very noncompetitive federal or print tax rate at 35 and get more into the competitive areas where other countries are. I know the Trump Administration and Republican Leadership want us to lead the world. It would take significant effort to make us more competitive with europe. Help us break down some of the issues youre dealing with, i want to introduce you to dave shepherdson. Mr. Shepardson there is no shortage of regulatory issues. Argue be the largest is the proposal to rollback title ii. Where does at t stand on Net Neutrality . What you think the final proposal will look like . Will there be some other proposal that retains rules . Where do you think the commission might come down on prioritizing nation . I have been in washington over 25 years. Net neutrality unfortunately feels like it has been around for the bulk of those 20 years. We have been very supportive of rules for open internet. Getsinly gets make mischaracterized by our opponents. Supportive ofery rules that preserve an open internet. I think you can throw them in the category of hope blocking or throttling. We have never been opposed to rules that preserve. When my predecessor was in this job, people forget he actually was the democratic witness in congress after Julius Genachowski passed an order real openhe first internet rules. The thing we had been opposed to was the application of the common carriage rules. The Communications Act of 1934. Not only for the at t companies that all of these dependent companies. Statute thatquated could use a significant update to that statute. We were opposed to utilizing that statute. We felt the use of title was going to lead to significant rate regulation. Is in a rate Regulatory Environment i think it will impact the investment that goes in. I think it would have had a negative impact in terms of the job we create. Thatnk we are hopeful through this process we will end up with some days ago open internet rules that can be enforced that will ensure an open internet. It will do you think Congress Getting involved, that there will be a finale to to this . I think that is the danger. Whenever this commission does we are in washington and we know the pendulum is swinging back and forth repeatedly. My fear is always that whatever this commission does, there is no question that the fcc chairman can move forward and they can eliminate regulatory basis for the rules. The medical pendulum swings the other way, where subject to the next fcc coming in and changing it out. The time for the permanent solution, i dont think there is room on either side. Everyone is in favor of some basic open internet rules that can be enforced. Issue, ther big previous fcc has voted in october for stricter privacy rules for isp as opposed to what websites face. Congress used the Congressional Review Act to overturn that. Since then there has been legislation introduced. Where do you see the debate going on privacy . How do we make sure consumers data is protected . Mr. Quinn i will say this. Ofas very much in favor congresswoman lack burns bill because it does things that are most important to at t. One is that everybody has to live under the same rules. In a world where you are seeing is this almost collide, you follow the Website Companies, that may be how google and these others started. There are way more Website Companies today. They look a lot like us. Google has a video product in the marketplace. It wont be long before they have their own aggregated bundle of content that is not historic looking. All of these companies should operate under the same rules. That has in one of our main contentions all along. It is because it does not matter. Who isnt matter collecting it. At the end of the day if we have rules around location i should have the same roles that google has or that amazon has or that facebook has. Blackbirds bill says that. They put all that regulation in the federal trade commission. We will have the same rules and be in the same Regulatory Environment. When the difficulties is what agency is regulating here and one over there, there can be disparate treatment. It is important that we are regulated in the same way. Is itird and final saying ensures that we dont end up with 50 different state regimes around vivus c. There is a federal rule that everyone has to live with. The internet environment, that is difficult to operationalize. Is harde to rules, it to operationalize. Those are the things that are most important to us. That is why we support the bill. The other issues in the bill they are not as important to me. You pick out the things you like and go fight for them. That is why we are very supportive of thought congressman blackburn is doing. Thinkepardson why do you the googles and amazons of the world see these issues differently than at t and verizon and comcast . Mr. Quinn that is a good question. They are probably in a better position to answer that. In general there is a lot of people who dont leave in reforming open internet. Cows givethe jenna roles in 2010 that even google wants. Think google got a lot of blowback from the left who were arguing for different rules. I think they pretty much just engaged in that fight. With respect to congresswoman blackburns vivus articulatedy have they do not like the opposition standards. To me that is less important than the equal treatment and one regulatory approach. Those are appropriate to us. Debate, it is always better to be arguing about how you will regulate some other person then you are fighting the regulation yourself. Spendk every hour they arguing about regulating someone else is in our theyre not spending fighting off the regulation. I think that is starting to turn in terms of this town. I think they will be a little bit more defensive. These issues we have more in common than not. You mentioned earlier about the merger from earlier. There is another merger potentially helping. What is the status . Mr. Quinn we are going through the process. The review in the department of justice last fall. Inhink we kicked it off november. Were going through a process with the depart in of justice. We expect to be able to close by the end of the year. We still have some core approvals hanging out there. We are not done with the foreign approval side. That deal has to go through that process. We have operations in brazil but they are not the only one. Our expectation is we should be through that process, we should be through the operational issues that we go through in order to be able to close without any transfers. Confident we will be able to get through that by the end of the year. Confirmedate has not the head of the trust division yet. Do you have any sense of what conditions the may seek . Think thati conversation is just beginning. We are at the point we have produced all the data and answered all the questions. That process will take off this summer. It is not clear how far in the process we will be able to go. I believe it was in 19one vote. Up withess will be tied other disputes that are partisan in nature. Inhink our expectation has their be confirmed before the july 4 recess. Think it is kind of early and be much are to find out exactly where they are at. Until they are sitting in their seats it is hard to predict. Mr. Shepardson obviously there is a lot of vertical integration going on in the industry. For rising just but yahoo . You are buying time warner. Why is that the right strategy . Wise it smart to own the content as opposed to license it . Mr. Quinn when we announced the deal, i think shortly after we , we unveiled deal the directv now product that we introduced. Really anv product is amalgam of all the reasons why we wants to do this deal. As being afuture mobile bundle deal. If you look at the press release we did at the time, i think we made the statement that the future of video is mobile in the future of mobile is video. We do the directv mobile merger. We made a commitment after extensive review to build 12. 5 million fibers to home connections. While that is a good start, it is a fraction of our life with print them a fraction of the total households in state. We are on the verge of the able to roll out a five g technology where i think it will end the debate once and for all as to whether mobile broadband competes with wire broadband. They are competitive today. They have been for five years. A placewe will get to where we will be able to achieve fiber like speeds on a broadband infrastructure. We had this debate last year. That is not the future of video. The future of video will be the combination of mobile over the top application where there is no satellite and a five g broadband infrastructure that i think is going to give people the ability to be to choose once and for all to completely cut the cord. The reason you want to own contact and if you listen to my boss talk in the weeks after the that hehe took the view had 90 a to do Something Like directv now. Our team had an idea. Subscribers and the content companies could Pay Attention to your log enough to negotiate the rights to that. It became directv and that number one up to 25 million was stills, it difficult to get the content companies to break out of the model that has existed for a long time in this country. By having what we consider to be anchor tenant to create new kinds of bundles, skinnier bundles, bundles that are more acclimated to what individual Consumers Want to see in the bundle rather than the 500 channels for 200 model that is what the cable industry evolved into. With its the more particular rise content for consumers combined with five g broadband infrastructure. It will really affect her ability to engage with cable companies. Take changes to and investment. The our mobile for the last mile. , they will to five g be mobile for the last couple hundred meters. Then we will have to get this traffic onto fiber infrastructure. Then it is basically a wired network. It will take an enormous amount of investment. That will create jobs in this country. It will really transform the market in ways that are exactly what policymakers are going to want which is public competition for broadband like no one has ever seen before. You talk to verizon about their attitude, their moving more towards an advertising direction. Thought thise particular collection of assets was the most powerful we could which together. With comcast moving aggressively into the wireless field, does this is speak that perhaps regulation should not be done in the silos it is currently done in . Thisuinn we started conversation with how antiquated this telecom actives. Youink anyone would tell you cannot use a statute that is going on 90 years old to regulate this industry. I think there is convergence going on on all levels. They are competing with their yahoo assets in the advertising space. The video distribution space. I think youve got a lot of Companies Whose interest are aligning again converging. Text messaging, people were really worried about. We had that huge debate. Can you believe we spent a minute thinking about that . It seemed like all of a sudden all these messages were on the cloud come over on the whatsapp. Virtually the market changed overnight. That is the speed at which we are using that moving and using a 90yearold statute. Will lead to bad decisions that will impact peoples ability to invest. Mr. Shepardson look at the price was going on on the wireless side. Then you have this constant pressure to unbundle to move more video content to the web. Where does all this disruption and up . Video provider . Mr. Quinn i dont know were all ends up. If you sit down in our board room with my ceo, i think you would tell you we have to keep moving. We have to keep transforming the business and staying ahead of the curve. In the end i think were going to be competing with all those companies that we talked about. I think we will be competing with facebook, amazon, google. Youre already competing. The most important thing is having a level Playing Field so when we are competing we have the flexibility to adopt the Business Models that attract consumers. At the end of the day that is what consumers like. They are starting to see that nothing is free and data is data. People are starting to clamor for more control. We got an enormous amount of criticism from privacy advocates when we rolled out in austin, texas and cap supported internet service. There was a price difference between the 99 an hour a month offer. I think privacy advocates screamed about that. And iuld make a choice think that as the privacy revolution involves, people are going to want more control and that is the pricing model that will ultimately be what Consumers Want. I dont know. To meet the companies the market demand with the Business Model that allows you to recover the investments you need to make to stay ahead of ie game, i think that is why always go back to give me the same regulatory structure. I am less concerned about the content as i am of making sure the the structure is right and we have the flexibility to compete with these companies who are from different regulatory backgrounds. Youll be talking about the internet of things, what do you think sec and the government can do to make 5g a reality . Mr. Quinn it is interesting. When google fiber got into the business they kind of changed the dialogue that you have with policymakers about making investments in your communities. I know craig has been out in this program. One of my counterparts over at verizon. Their experience with a tried to , their strategy was basically kind of the cable strategy. Were going to go into every city and negotiate with the city to allow us the ability to build a fiber infrastructure. There are cities that never got to agree with us. I think they have turned that around with a recent nows. They had this cities kind of competing with one another. We are going to have you guys create a licensing structure and you guys have to kind of come up with a competitive structure. I think when that happened, we immediately raised up our pens and said we like that structure to frank. Too. That cleared a lot of the pathway to the kind of investments that needed to be made. Going to have to get small cell architecture out there. Those will be a couple hundred meters apart. That is it an enormous amount of fiber to put in the ground. Permits it easy to get through, applications, permits, deploying the fiber. It makes that simple and official is the most important thing we have. Successful in almost a dozen states this year. Were trying to get the infrastructure in place to build the 5g network of the future, the near future hopefully. The way to make that happen is going to be important. 5g will go to the public rightofway. Things that are already there. I think we just need the environment that is conducive to make sure that happens. The 6 billion plus contract, where is that money go again what is being developed . Mr. Quinn we have been awarded the contract. You have to either opt in or opt out. Yesterday was june 19. We made the preliminary state plans for all the different states about what the network in your state will look like. That will be in the process we will negotiate with the states. All of those states will have to either opt in or opt out of the edible contract. If all the states opt in over the course of the next several years we will get 6. 5 billion for the infrastructure necessary for the nationwide Broadband Network for public safety. We will Start Construction and it will take a couple years to build that network. Andill Start Construction once we do that it is up to us to then go out and get all of the Fire Departments and volunteer Fire Departments and Municipal Police and state police. We just have a license to hunt. We can go out and Sell Services very we will have partners. Deliver one of the promises of one of the last remaining open promises of the 9 11 commission which is to build a nationwide Broadband Network which allows First Responders to have complete interactive abilities. Completely to be interoperable. They will all be operating on the same infrastructure. I think it is a real plus for the united states. Stages ofthe opening a 25 year