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CNBC Excerpts: AT&T’s Randall Stephenson and Time Warner’s Jeff Bewkes Speak with CNBC’s “Squawk Box” Today

WHEN: Today, Monday, October 24th

WHERE: CNBC's "Squawk Box"

Following are excerpts from the unofficial transcript of a CNBC interview with AT&T Chairman and CEO Randall Stephenson and Time Warner Chairman and CEO Jeff Bewkes on CNBC's "Squawk Box" (M-F, 6AM-9AM ET) today, Monday, October 24th. Following are links to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000561917, http://video.cnbc.com/gallery/?video=3000561925 and http://video.cnbc.com/gallery/?video=3000561927. Additional clips are available on CNBC.com.

All references must be sourced to CNBC.

STEPHENSON ON THE MERGER

THIS IS ONE WHERE THE NATURE OF THIS DEAL IS UNIQUE FROM ANYTHING WE'VE DONE BEFORE, AND IT'S A VERTICAL INTEGRATION, ITS A BIG MERGER, BUT IT'S A VERTICAL INTERGATION AND AS YOU THINK ABOUT THE AREAS THAT HAVE BEEN REALLY CONTENTIOUS OVER THE LAST FEW YEARS IN OUR INDUSTRY AND IN JEFF'S INDUSTRY, THEY HAVE BEEN HORIZONTAL MERGERS WHERE THE GOVERNMENT WAS BEEN CONCERNED ABOUT A COMPETITOR BEING TAKEN OUT OF THE MARKETPLACE. THIS HAS NONE OF THAT. THERE ARE NO COMPETITORS TAKEN OUT OF THE MARKETPLACE. WE COMPETE NOWHERE . WE ARE NOT TALKING ABOUT CHANGING HOW THE CONTENT IS MADE AVAILABLE TO OTHER PEOPLE OR CUSTOMERS OR DISTRIBUTORS IT'S A PURE VERTICAL INTEGRATION, AND WHILE REGULATORS WILL OFTEN TIMES HAVE CONCERNS WITH VERTICAL INTEGRATIONS THOSE ARE ALWAYS REMEDIED BY CONDITIONS IMPOSED ON THE MERGER AND SO THAT'S HOW WE ENVISION THIS ONE TO PLAY OUT.

STEPHENSON ON DIRECTV NOW

AS SOON AS WE CLOSED DIRECTV, WE WENT FULL OUT ON DEVELOPING THIS. IT'S A PURELY OVER THE TOP VIDEO PRODUCT, DIRECTV NOW IS WHAT WE ARE CALLING IT AND WILL BE LAUNCHED NEXT MONTH AND IT'S A MOBILE CENTRIC PRODUCT THAT WE ARE DELIVERING IN THE MARKETPLACE, 100 CHANNELS PREMIUM CHANNELS AND WE ARE BRINGING IT IN IN NOVEMBER, WE HAVEN'T ANNOUNCED THE PIRCE POINT BUT YOU SHOULD ASSUME THE PRICE POINT WILL BE RADICALLY LOWER THEN WHAT ANYBODY HAS SEEN IN THE MARKET PLACE FOR A HUNDRED CHANNEL PRODUCT, 100 CHANNELS IN A BUNDLE. AND THAT'S COMING TO MARKET. PURELY MOBILITY DRIVEN. PURELY OVER THE TOP THIS IS A WHOLE NEW CAPABILTY IT WILL BE NATION WIDE.

STEPHENSON ON TIME WARNER CONTENT

I'VE READ ABOUT THIS IN ALL THESE NEWSPAPERS THIS MORNING ABOUT RESTRICTING THE ACCESS TO THE TIME WARNER CONTENT, ITS NONSENSICAL. WE'RE BUYING TIME WARNER FOR $100 BILLION INCLUDING DEBT AND THE'VE BUILT THIS AMAZING FRANCISE, DISTRIBUTING THEIR CONTENT BROADLY AND DEPPLY ALL OVER THE WORLD AND THE IDEA THAT WE'RE GOING TO COME ALONG AND START TO CONSTRICT THE DISTRIBUTION OF THIS CONTENT MAKES NO ECONOMIC SENSE. THAT WOULD BE A CRAZY IDEA AND SO THE IDEA THAT IS GOING TO BE A BY PRODUCT OF THIS IT DOESN'T MAKE SENSE.

STEPHENSON ON MOBILITY

SO WHAT DOES CHANGE? WHY PUT THE TWO COMPANIES TOGETHER? IT GETS BACK TO WHAT JEFF JUST SAID – SPEED. THE WORLD OF DISTRIBUTION AND CONTENT IS CONVERGING AND WE NEED TO MOVE FAST AND IF WE WANT TO DO SOMETHING TRULY UNIQUE, BEGIN TO CURATE CONTENT DIFFERENTLY BEGIN TO FORMAT CONTENT DIFFERENTLY FOR THESE MOBILE ENVIRONMENTS, AND THIS IS ALL ABOUT MOBILITY. THINK DIRECT TV NOW THE NEW PRODUCT WE'RE BRINGING TO MARKET. WHAT CAN YOU DO WITH TIME WARNER CONTENT REALLY FAST AND VERY UNIQUELY FOR OUR CUSTOMERS CAN YOU BEGIN TO INTEGRATE SOCIAL INTO THAT CONTENT CAN YOU GIVE THE CAPABILITY TO…I'M WATCHING CONTENT I WANT TO CLIP IT I WANT TO SEND IT VIA SOCIAL MEDIA TO MY FRIENDS. CAN WE IDERATE ON THAT QUICKLY AND CAN WE GIVE A UNIQUE EXPERIENCE TO OUR CUSTOMERS THIS IS WHAT WE ARE AFTER. SPEED OF EXECUTION AND CHANGING THE GAME.

STEPHENSON ON RUNNING A MOVIE STUDIO

ONE OF THE PRIMARY ISSUES WE DISCUSED IS THIS ISSUES THAT YOU'RE ARTICULATING. I DON'T KNOW HOW TO RUN A MOVIE STUDIO. JOE WE HAD FUN WITH IT YOUR EXACTLY RIGHT BUT I KNOW NOTHING HOW TO RUN A MOVIE STUDIO AND MAKING SURE THAT THE TALENT IS RETAINED AND WE ORGANIZE THE BUSINESS POST TRANSACTION SO THAT THE BUSINESS IS OPERATED AND RUN LARGELY LIKE IT IS TODAY AND THAT'S A HUGE PIECE OF THIS AND I FEEL REALLY COMFORTABLE WITH JEFF'S PLAN ON KEEPPING THE TALENT IN PLACE AND ENSURING WE HAVE CONTINUITY.

STEPHENSON ON THE DEAL

WE'RE NOT CONFUSED. WE RECOGNIZE THIS WILL GET A FULL REVIEW. IT WILL GET A FULL REVIEW AT A NUMBER OF PLACES., A NUMBER OF AREAS. OUR EXPERIENCE IS THAT THE DATA AND THE LAW AND THE REGULATIONS WILL DICTATE WHETHER THE DEAL GETS APPROVED OR NOT.

STEPHENSON ON RATES

WE'VE GOT A $40 BILLION FACILITY IN PLACE RIGHT NOW TO FINANCE THE THING. THE OBJECTIVE WOULD BE TO PUT TERM DEBT ON THIS AND TAKE ADVANTAGE OF A LOW INTERST RATE ENVIRONMENT. TERM IT OUT AND SO YOU DON'T WORRY ABOUT THAT. AND SO AS YOU DELEVERADGE, YOU'RE NOT HERE SITTING WORRYING ABOUT INTEREST RATE FLUCTUATIONS AND SO FORTH.

BEWKES ON THE COMBINATION OF THE COMPANIES

WE WERE TALKING ABOUT WHATS HAPPENING IN MEDIA ALL THESE NEW PRODUCTS LIKE SUBSCRIPTION VOD NETWORKS , ALL THE INCREASE IN MOBILE CONSUMPTION OF VIDEO AND AS WE GOT INTO IT WE WERE TALKING ABOUT WHAT THE MEDIA COMPANIES ARE DOING AND WHAT THE DISTRIBUTION COMPANIES NEED TO DO WE REALIZED THAT IF WE HAD OURSELVES TOGETHER THAT WE COULD CREATE MORE INNVOATIONS FOR CONSUMERS SO THEY CAN HAVE MORE CHOICES OF PACKAGE. THEY ARE GOING TO END UP WITH MORE COMPETITION THEREFORE LOWER PRICES.

BEWKES ON THE ADVANTAGES OF THE DEAL

THERE'S GOING TO BE BASICALLY MORE AFFECTIVE ADVERTISING, SO IT WON'T BE AS DISRUPTIVE. YOU'LL HAVE MORE EFFICIENCY THERE, AND THAT MEANS MORE OF THE COST OF ALL THE GREAT PROGRAMMING THAT'S BEING MADE ON TV CAN BE BORN BY ADVERTISIN. AND IT CAN BE ADVERTISING THAT IS USEFUL TO YOU RATHER THAN SOMETHING YOU ARE NOT INTERESTED IN. SO THOSE ARE THE ADVANTAGES, AND FOR YEARS WE HAVE BEEN TRYING AT TIME WARNER TO GET ALL THE NETWORKS ON TV. NOT JUST OURS, BUT EVERYBODY'S TO BE ON DEMAND. AND WE THINK THIS WILL ENABLE US TO DO THOSE THINGS FASTER.

BEWKES ON COMPETITION

IF YOU LOOK AT LAST YEAR, MORE THAN HALF OF THE GROWTH IN ADVERTISING IN THE UNITED STATES WENT TO TWO COMPANIES – GOOGLE AND FACEBOOK. AND WE NEED TO INCREASE COMPETITION FOR ADVERTISING ACROSS TELEVISION, INTERNET COMPANIES. THAT'S AN IMPORTANT THING. AND WHEN YOU DO THAT, WHAT YOU END UP WITH IS MORE OF THE BURDEN BEING BORN BY ADVERTISING COMPANIES, LESS OF IT BEING BORN BY CONSUMERS.

BEWKES ON APPLE

I THINK THEY ARE IN A DIFFERENT BUSINESS. THEY ARE BUSY WITH PHONES AND DEVICES ON A GLOBAL BASIS AND I'M NOT SURE THEY ARE FOCUSED ON MEDIA PRODUCTION…WE DO A LOT OF BUSINESS WITH APPLE AT CNN, AT HBO, EVERYWHERE. WARNER BROTHERS. AND SO WE TALK TO THEM ALL THE TIME ABOUT A LOT OF THINGS, NOT ABOUT MERGING THE COMPANIES.

BEWKES AND STEPHENSON ON OTHER MEDIA NETWORKS

BEWKES: THEY DON'T ACTUALLY HAVE TO DO ANYTHING, NOR DID WE. THAT'S WHY WE DIDN'T CONSOLIDATE WITH ONE OF THE OTHER MEDIA COMPANIES.

STEPHENSON: THE INNOVATIONS THAT WE'RE GOING TO DO WILL BE AVAILABLE TO EVERYBODY. OUR EXPECTATION IS IF WE EXECUTE ON THIS, THESE ARE THINGS THAT OTHER CONTENT PLAYERS ARE GOING TO WANT TO PARTICIPATE IN. IT'S NOT SOMETHING WE WILL JUST DO FOR TIME WARNER.

STEPHENSON ON STRATEGY AND OTHER COMPANIES

TO THE EXTEND THAT OUR STRATEY SUCCEEDS, I THINK OTHER COMPANIES WILL TRY TO LOOK LIKE US. IF OUR STRATEGY DOESN'T SUCCEED, OTHER COMPANIES WON'T BOTHER. SO I THINK IT'S A FUNCTION OF HOW WELL WE DO TOGETHER IN PULLING THE STRATEGY OFF.

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