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AT&T has been building foundation for Time Warner deal for a long time, CEO says

Randall Stephenson, CEO of AT&T
Andrew Harrer | Bloomberg | Getty Images
Randall Stephenson, CEO of AT&T

AT&T has been preparing to do something like its proposed merger with Time Warner for a long time, according to CEO and Chairman Randall Stephenson.

In October, AT&T reached an agreement to buy Time Warner for more than $85 billion. AT&T argues that Time Warner and its premium content, which includes HBO and CNN, would complement its distribution network, rather than create an unduly large giant in the media space.

During a Wednesday conference call with investors and analysts, Stephenson explains that the company has been heavily investing in its network to prepare for "a world where mobile technology and premium video content would intersect." That's a future that AT&T has long considered "inevitable," Stephenson said.

Stephenson said it was the logical next step for AT&T to position itself for that future, aiming to become the "premier integrated communications company in the world." He explained that AT&T wanted to "have the foundation laid" ahead of time to make that intersection a "very different experience for our customers."

Earlier Wednesday, a group of Democratic senators sent a letter to Stephenson and Time Warner CEO Jeffrey Bewkes asking the executives to explaining how the deal would benefit the public.

Signed by Sens. Al Franken, Elizabeth Warren, Bernie Sanders, Cory Booker and others, the letter asks for a "public interest statement detailing how you plan to ensure that the transaction benefits consumers, promotes competition, remedies all potential harms, and further serves the public interest through the broader policy goals of the Communications Act."

In AT&T's earnings release, Stephenson said the deal is "the logical next step in our strategy to bring together world-class content with best-in-class distribution which will drive innovation and more choice for consumers."

The senators expressed lingering concerns about the size of the deal given, "AT&T is already the world's largest pay TV provider and the largest telecommunications company."

"Combining it with one of the world's largest producers of content gives AT&T-Time Warner both the incentive and ability to use its platform to harm competitors, and as a result, consumers," the letter said.

AT&T also reported earnings on Wednesday that were roughly in line with analyst expectations.