AT&T Executive Makes Distribution Case for Time Warner Merger

Says it would lead new video revolution, free up digital rights

David McAtee, AT&T senior executive VP and general counsel, took to the web to make a case for the AT&T-Time Warner deal, an appropriate venue since access to web content will be a key factor in the regulatory review of the deal.

McAtee blogged that the deal would be a revolution in video distribution.

He said the merger would build on the company's acquisition of DirecTV, saying that combining the programming assets of a Time Warner—TV shows, movies, CNN—with a wireless provider would transform video and mobile internet.

He said it was all about delivering content to consumers the way they want it, and that the deal would ignite innovation and help the combined company better compete with "entrenched cable companies."

That was the same pitch AT&T made for the DirecTV deal and the same theory behind launching U-verse, though that did not become the video competitor AT&T had hoped.

But now the competition is in the online space.

McAtee suggested the deal would be a boon to online access to content—a big issue with the Tom Wheeler FCC and the Barack Obama administration. "Together, these two companies will help build a new online video ecosystem that features broader distribution of Time Warner’s content, ignites innovation for all viewing platforms, and spurs greater investment in the nation’s broadband infrastructure, particularly  ultra-fast 5G wireless networks that will one day compete head-to-head" with traditional offerings, he said.

He was hitting all the right notes for an FCC concerned about the issue of limiting rights to online content, an issue that came up between Time Warner Cable and Charter in that deal.

"Because the video ecosystem is rapidly evolving in unforeseeable directions, it has been difficult for major content producers and distributors to negotiate contracts with the digital rights necessary to support the full range of potential innovation and experimentation and to respond quickly to today’s fast-changing marketplace," he said. "Bargaining friction over these rights has limited the scope of video innovation and perpetuated conventional distribution models that benefit incumbent cable companies, which still dominate traditional television distribution and ultra-fast broadband services, already control substantial content, and now intend to move into mobile as well."

He said that the first combo of a nationwide mobile broadband provider with a content provider as an "anchor tenant” will be a boon to video choice.

Deal critics are already on the record saying they fear that the combined company could discourage competing tenants or distributors, but McAtee said that, "of course," its offerings would "include content from many other providers."