Full distribution. We have to compete. As an independent network, i feel the pain that miss ziman feels. At access tv we gear ourselves as a Music Network geared toward the 45plus. We dont like to tell our advertisers that but thats who watches more tv and its a challenge for to us get distribution, but with the new methods of distribution like directv now, and others, in a has opened the door. In the past, the distribution was constrained, as miss ziman mentioned because of band width. You couldnt put on another High Definition network particularly with standard definition which took up even more band width. Now new methods of distribution, theres new hope. Theres more hope for independent Networks Like ours, and i think this merger opens up doors. As an example on directv now, access tv is distributed in their 35 bundle. Hd net movies is not. Weve got to do a better job at hd net movies to convince them to carry us. That onus is on me. To your point earlier its very competitive. Its a free market still in a lot of respects and i think this combination opens doors. I think they recognize now that band width is more available through online offerings. They can support more independent networks, more minority owned networks and weve seen that start to happen. I think the combination of them owning content, theres a lot of things looking at online content and particularly television distributed content and we say why dont they do that, it just makes perfect sense for us to have remote dvrs or other features and as a content owner, id love to offer the features as a smaller content owner but until the big guys start doing it and set the precedent, us little guys dont get to offer it. The new precedents that are set i think will really push the way for Better Services and more consumer friendly services, and really expand the ability for independent networks to compete. Thank you. Mr. Bewkes, could you talk about what factors today add friction to your ability, this is predeal, before the deal, as you exist today, what causes friction to your ability to innovate and how would this merger with at t help your content developers provide better and quicker and cheaper content for at t consumers . Thank you, senator. The main friction now is that we have to put our networks through the existing cable satellite distribution plant, which had a certain technological ability to it. Only recently did it have the ability to do video on demand. Increasingly were competing against video being delivered over broadband only that has full twoway video on demand and where the Broadband Services have the direct retail data of what youre watching, who you are, where youre buying your stuff, so it implicates advertising and subscription. What weve been trying to do is to, and we did it with hbo first and then with turner second, but we really havent opinion been successful in the broad 100 channels we have in our homes. We tried to make our channels all video on demand in a way you could go as a viewer and search back and forth, watch full seasons, really get the same because theres theres more and more networks and content available but you need to be able to search the way do you on it netflix or apple tv, that kind of thing. Most of the Distribution Companies particularly cable companies, have not uniformly offered that, and the way that American Consumers get a change in their habit about something as important as television is it has to be consistent across all the channels, and it has to be national. And we think if we can get this going, competition with lower prices, better smaller bundles, more effective advertising, can bring more competition in all of these areas, we dont obviously and we cant determine what all the other Media Companies do. We dont have that big of a market share, but if we can put a competitive innovation in the hands of consumers, we think consumers liking it can get those changes to be universal adopted. That would give us a chance against these giant Technology Companies that by their own definition have massive global scale. Thank you, mr. Chairman. I have other questions id like to submit to the witnesses in writing. Without objection, theyll be admitted, thank you. Senator blumenthal . Thanks mr. Chairman for having this hearing and thank you all for being here. I have serious concerns about this transaction. I have yet to be convinced that the benefits outweigh the harms to competition, and possibly to consumers. It is a vertical merger. It doesnt take out a competitor, but it potentially has seriously negative impacts on competition and on consumers, and it is different from the nbc comcast merger which as mr. Kimmelman points out has had problems itself and had to be modified by regulators. It involves wireless. Its a national platform, and it involves more than one platform, but speaking very bluntly, what i think, what any of my colleagues think may make no difference whatsoever, because donald trump has said hes going to block this merger, and i take him at his word. Why . We operate as an act here. I know that mr. Stephenson youve met with the Trump Transition Team. Have you met with the Trump Transition Team . No, senator, i have not. Well then what remains on the record is that the president of the United States or i should say the future president of the United States has said hes going to block this merger and he said it emphatically and unequivocally and he has said it because, and i quote, its too much concentration of power in the hands of too few. A classic antitrust analysis from the president elect. Im a strong supporter of antitrust enforcement, and i may well agree with donald trump. What concerns me is the reason that he gave an additional reason which is that he is very unhappy with the cnn News Coverage and for a public official to use the blunt, heavy instrument of Law Enforcement to try to silence or change coverage by a News Department of any company is, for me, absolutely abhorrent. Would you agree . Are you referring to me . Im sorry. Im asking both you, mr. Stephenson and mr. Bewkes. Senator, im a novice in the world of politics so i would struggle to engage at that level. My expectation was when we announced this deal and is today that the department of justice will be the one reviewing this transaction and making the determination whether its competitive or not and is it competitive under the law so our expectation is to present our facts. We believe the facts will be compelling and good that this is procompetitive and proconsumer so ill leave it at that. Mr. Bewkes . Yes, and i entirely agree with what mr. Stephenson just said. In terms of the independence of our journalism, and i hope all the or journalistic owlets, we have always vigorously defended that for decades, whether when we were at time inc. Or whether we had cnn, and were going to continue defending and being an independent journ lalistic voic. Everyone that watches us may have their own opinion about whether we succeed in being objective. We try hard everyday and were going to continue to do that. You understand that what troubles me is that the president elect has said that his Justice Department will enforce a different standard of law depending on what kind of coverage his administration receives. Will you commit that your News Coverage will in no way be influenced or impacted by what the president of the United States says about this transaction . Yes. Mr. Stephenson . Yes, sir, of course. Yeah. And wouldnt you agree with me that for anyone in the department of justice or any Law Enforcement agency to threaten or use more vigorous or aggressive Law Enforcement in effect in retaliation for News Coverage that doesnt please that public official would be an abuse of power . Would, if youre asking me. Im asking you and ill turn to other members of the panel as well but youre the ones who will be making decisions about cnn and, by the way, the president has made similar kinds of remarks about nbc and about the Washington Post in terms of the enforcement of laws potentially against them. The president elect. May i make a comment . Please do. I dont think we should be selective about retweeting here or restating the various comments that various elected officials or those running for office made upon the announcement of this merger because there were comments made by candidates on all sides, including mr. Sanders, mr. Tim kaine saying they were against the merger, again, before any of them had the information. What randall and i are saying is were confident that once everyone, including all the questions you asked today, hears the facts and has the appropriate Competitive Analysis on this, that it will be seen and concluded by everyone, even with the concerns you have stated, that this will have procomppetitive effects, that will benefit both competitive structures, diversity of voices and Consumer Price alternatives. We believe it and we think we can prove it. And i just want that i want to make clear that my point here is not that other candidates may have commented or not about this merger. It is perfectly appropriate for a public official or a candidate to comment on the merits of antitrust enforcement. But to threaten more vigorous or adverse enforcement against a particular company because he doesnt like the News Coverage is a threat to the first amendment. Thats the fundamental point here. Im a believer in strong antitrust enforcement, i welcome president elect trumps interest in this area. I find absolutely abhorrent the threat against a News Organization based on its content of more vigorous or adverse enforcement against it simply because of a dislike of that coverage and i welcome your commitment that his statements will have absolutely no impact on the content of cnns coverage. I hope the same will be true of nbc and the Washington Post because this kind of potential abuse of power is a threat to iss i fundamental liberties way larger than the issues were discussing right here. Thank you. Senator tillis, youre up to bat. Thank you, mr. Chairman. I want to get back to the merger. [ laughter ] and the potential acquisition and actually i would like to start, mr. Bewkes, or mr. Stephenson, if you could briefly explain to me how this directv now product that youre offering and distributing through at t network, how that how you may enter into other relationships with other wireless providers to accomplish the same thing and how would those transactions look . Yes, thank you, senator. Actually, we stole the concept for directv now with free data included from prior deals that we have done. In effect this premise of free data, if you will, with directv now, it actually goes back decades. The first instance of it was a 1800 service when you called sears and roebuck, you dialed 1800 and sears and roebuck picked up the tab for the Long Distance service. And that actually drove Long Distance prices down over time. Suddenly everybody started using that type facility to get people to call their franchise so what happened then in 2008 is amazon launched a really groundbreaking product called the kindle and we did a deal with amazon where they actually when you delivered a book to the kindle, you paid 10 for your book, that included the data charge. Amazon paid at t directly that data charge. Thats the concept we took advantage of with directv now. Directv is paying the charge for the data to the mobility business. And by the way, that is our lowest wholesale rate available in the marketplace today to directv, to amazon, to any big, small, Mediumsized Company that wants to do this same approach, were actually convinced that just like 800 service drove Long Distance prices down this will also drive video prices down as people leverage the same capability. I think thats right. And mr. Cuban, i almost hesitate to speak with a hoosier after the devastating loss of the tar heels a week or so ago but im going to anyway. Consolidation we dont see going on. When i went through the list with facebook, amazon, all the content, the primary content came through acquisitions. Their biggest content plays were acquisitions. Whats happening now is theyre not acquiring Big Companies like time warner, theyre acquiring Disruptive Companies that are choosing not to go public for a hundred Million Dollars or a billion dollars that flies completely under the radar. Thats how theyre competing. Ill give you a perf example how the nature, and its kind of silly, but how the nature of content is changing. I wanted to test Facebook Live just to see what kind of audience i could get. No lie, i took my breakfast, empty plate, one pepper on it put up Facebook Live and within a minute, i had 1,500 live viewers. Within 30 minutes i had 10,000 live viewers. I thought, okay, maybe thats just Facebook Live, its new. I went to a new platform called lively. I was with my kids. Again, i try to be a geek and keep up with this. My kids were going down a slide into the lake. And i just put it on them. On lively within 20 minutes i had 35,000 live viewers. For an independent network, 35,000 live simultaneous viewers is huge. Thats changing the news. Cnn, a great program, is 2. 5 Million Viewers watching it at a given point in time. Thats nothing on Facebook Live compared to and other platforms. Its changing whether we want to admit it or not and its having significant impacts and the biggest challenge is getting people to watch tv. Thats going to be you know, with all these things, youre hoping to find new ways where people go back and say, okay, i want to try watching tv again. And that will increase and we see it with the nba and the nfl and all forms of content. And i think Something Else that one of my colleagues mentioned was well, first off, if i take a look at hbo, hbo became a premier channel not because they charge people to watch it but because they have extraordinarily good content. Extraordinarily good content that people will be willing to pay a premium for but theres a lot of times when im channel surfing which usually happens late at night when im back in my i dont get to channel surf as much when im at home because my wife can control the remote. But when im working, im going through all these channels going, why am i going through all these, and am i paying for them . Nbc is not free. Abc is not free. Theyre all negotiating some baseline cost that go into your baseline cable bill and i would like to reach a point in time where i have a freedom to have options, a sportsless option seems like a very sad place to me, but some options. To where i dont necessarily have channels that i consider extraneous based on my viewing habit, and from time to time, ill pay a premium if i want to go and access content that maybe on a channel that i would not regularly want to pay for because i dont have a need or desire to have that. Thats the model were getting to and i think if we dont as a matter ill leave it to the antitrust division in the department of justice to ask you the right questions to make sure youre not wading in any antitrust areas. But if we as a body resist, if we just continue to focus on where the puck is, versus where the puck is going to be in terms of content delivery, in this industry ten years from now, i think were at a disadvantage to real innovators. Theres legitimate issues that need to be addressed but we need to be very, very careful or were going to cause some of the leading innovators in the world not to be able to innovate because constraints were putting on people using old world models to assess where the new horizons are for content delivery. Thank you. Senator flake. Thank you, chairman. Thanks for having this hearing. Its been enlightening. Im trying to view this through the lens of my own kids. I have two married kids, newly married, who would no more sign up for directv or dish or broadcast than they would to get a land line in their home. Its just not something they would consider. They might try to crib off of my directv, find out the password and use it but they would never think of that. And thats why when i hear mr. Zimmerman talk about this and the competitive angle, it seems like an excellent argument youre giving that would have been more appropriate ten years ago or 15 years ago. But it doesnt seem to be where the puck is or certainly where the puck is going. I think we have to consider more who the competition really is, that this isnt traditional antitrust Competition Among broadcast media but among the edge providers and mr. Cuban you talked in your statement about the real competition. Do you want to talk a little more about that . About who the real competitors are. Apps compete for our time now. As i mentioned, when we look for something to do or a way to kill time, we look at our phone. All you have to do is look at the rise of snapchat, the rise of lively, the rise of instagram. Thats what consumes our attention. Kids dont go to tv anymore. You mention your children. I have a 7yearold, and i went to help coach his baseball team, and none of them knew the rules. Because none of them ever watched tv and watch baseball like we grew up doing. They didnt know the rules for football. I mean i cant even bribe my son to go to a cowboy game. Thats just not how it is. But if i take away his minecraft videos, he throws a hissy fit. And sure our Consumption Habits change as we age, but and