Randall Stephenson, Chairman & CEO, AT&T With Jeff Bewkes, Chairman & CEO, Time Warner.

CNN chief business correspondent and early start anchor Christine Romans who is joined by the heads of both companies.

Hey Christine, hi. It's literally a big deal.

Alison, thank you. Joining me right now, Jeff Bewkes, the Chairman and CEO of Time Warner, and Randall Stephenson, the Chairman and CEO of AT&T. Gentlemen, thank you, congratulations. Let's talk. Randall, why buy Time Warner?

It seems to us like a very natural extension of what we do. We're in an environment where our customers are demanding more and more video, more and more entertainment content, not only on the TV but on the mobile device. And we have a really large customer base in mobility, and the ability to take really premium quality content to our customers in the mobile environment is huge for us. It's huge for our customers. And as we made the scan and look for premium content to bring to our customers, this is the premium content we think on the planet right now. And so the ability to do something special like this with Time Warner, this is a very natural extension for us.

Why sell now, Jeff?

So what changes for the consumer? For somebody watching us right now, Randall, what changes for them with these two companies together?

Oh, I think you're going to see the pace of innovation in terms of delivering meaningful premium content to the customer on mobile devices, that pace of innovation is what's going to change. And we all are trying to innovate in this way, and our experience is when you're trying to do meaningful innovation and bring new product and capability to market, doing it in arms-length contracts is always really, really hard. And so you put these two companies together and now that companies are working together to change how the customer experiences entertainment, how the customer experiences CNN, literally that's what we think will change. The customer's demanding not only the entertainment, not only the content, but the ability to integrate social, doing clipping and posting and social interaction with their content. So these are the kind of things we really want to move fast.

Talk to me more about how you see the future audience consuming this stuff. You know, you've got this young millennial who, in many cases, they don't want to ever have a cable package, right? They're viewing this content differently. How does this deal see that or feed that?

So the millennials, and in fact our customer base in general, is not consuming less content. Our customers are consuming more premium content today than they've ever consumed, but they're consuming it in different places. They're not consuming it just on the television in the living room, they're consuming it now on their tablet, they're consuming it on the mobile device on the go, and they're consuming it everywhere. And it's really stark if you look at the amount of volumes, how they're increasing traffic going to these mobile devices, that's video driven. So we see that continuing, but we see that if we can actually innovate and then curate the content differently and bring to the customer differently, we actually think this doesn't slow down, this accelerates. And that this is a really important thing here because we're really excited for ways of content differently as these are the question of differently. We obviously, many devices continues to grow, it gives us more and more incentive to invest more and more in infrastructure and innovate in infrastructure. This idea of 5G technology, what is that? It's the next generation of mobile technology. So think about the fastest internet speed you get from the cable company as a gig, right? But you can buy a gig of speed. 5G will allow us to provide that gig of speed to you wirelessly. And as we innovate this kind of content, having a one gig wireless network so our customers now can consume any kind of content, any kind of video anywhere, ultimately we think we'll be competing head-to-head with the cable companies with a wireless offer. We can hit those kind of price points, combined it with this kind of content, we think this is exciting.

We're talking about that cable-free customer, the customer who wants to be cable-free. For you, Time Warner, you and I've talked about some of the things that Time Warner has already been doing to sort of see this, FilmStruck for example. Talk to me a little bit about how this deal, how the steel fits into that.

So eight weeks ago you first met in this building to just to start kind of talking about this, and that's pretty quick for such a big merger. Tell me a little bit about the timing here because we are in the midst of what is I think the most populous presidential election in modern history where, you know, big is bad. And I'm wondering if that timing plane had any effect on you guys.

No, it had no effect on it. I came to see Jeff because our businesses obviously do a lot together and then we buy a lot of Time Warner content. And so we see each other regularly, we get together regularly. And came by to see Jeff, we had lunch, and as we began to talk, me about where I saw the world of distribution going, 5G that we've spoken of here this morning, and where he saw the world of content and premium content moving. And we just really came to an agreement that these things are converging and they're converging very, very quickly.

Thank you. I mean, a movie studio and a phone company, and when you think about how quickly things have really changed in terms of both of your businesses, I'm wondering about the regulatory scrutiny. I mean, you look at the front pages of papers today and, you know, immediate opposition is almost in every single headline or first paragraph. We've heard folks on the campaign trail talking about, Hillary Clinton has said that she will, you know, her spokesman said that they will, you know, give it scrutiny if she is President. Donald Trump says it shouldn't be allowed to happen. And there will be hearings in Congress, no question. Are you worried about the regulatory scrutiny at all?

Obviously, we're very attentive to it. We've announced a lot of big deals and this is not too much different than what we've seen in the past. This deal is unique though from any deal that we've ever done of any size. And in fact, it's unique in this regard: this is a true vertical integration of two companies. Explain what that means? It means it's not as if two companies do the same thing already. Yeah, so think about AT&T, we tried to buy T-Mobile, that was a horizontal integration, that was a concern that the government had is that a competitor was viewed to be taken out of the market. This transaction is not horizontal, we don't compete. In fact, it's vertical. Jeff is a supplier to AT&T, his content is part of our package. We buy vertical integrations have a very standard review in the regulatory process and there's not a competitor being taken out. And in fact, you're hard-pressed to find in either one of our industries a time when a vertical integration was shot down by regulators. Generally what happens is where the regulators have concerns with a merger like this, they'll put conditions on it and impose conditions to help remedy the concerns that they may have.

You're ready for that?

Yeah, we're ready for a review. We expect it to be a vigorous review. Like you said, we're sure that we'll get a chance to visit with Congress and tell our story there. But we feel like the information and the data will drive this and the law will drive it.

It's just been compared, some have been raising the Comcast NBC merger saying, you know, there was some, you know, it's been super failing to keep some promises that had made under that deal. Does that hurt you? Does some of the armchair quarterbacking after that deal, does it hurt you in here at all?

I mean, look, when the regulators looked at Comcast NBC, the biggest concerns at that time, there are two of them, right? Net neutrality, need to ensure that they protected net neutrality and over-the-top video. And I think if you look at this transaction six years after that, the net neutrality debate, I think it's over. I think the case was settled by the circuit court and I think net neutrality is behind us. Over-the-top, I think Netflix is somehow going to make it. I think we will pull through, they're either going to make it.

We ask you about CNN and its independence here because CNN is just one of the many, many name brands that are in the Time Warner stable. But you have said that AT&T will not be reaching in to how CNN does its business or tells its stories.

I watch how Jeff manages this business today and I think it's a model for how we want to manage it in the future. And look, I think of a brand like CNN and the key variable of your brand is your independence. And when people watch CNN, are they getting an independent assessment and reporting of the news? The last thing we want to do as AT&T is in any way taint that in the slightest bit.

And you, Jeff, you understand this separation of, you know, you've been at CNN for many years and it's been owned by Time Warner, has it been interfered with?

What changes for the Time Warner brand? You stay on for how long?

So you keep Time Warner sort of operating those brands as they are now with the leadership they have now?

At what point, you know, the operators to sort of separate companies, AT&T and Time Warner?

Yeah, I mean, you should think of Time Warner becoming a wholly owned subsidiary of AT&T. And look, I mean, Jeff has built an amazing company over here with some amazing brands and I don't envision us stepping in here and like we're going to fix this. I mean, this is a well-run company. I thought I said at the very beginning, I think this is the premium content brand company in the world. So I don't envision us changing a lot of what we do. What we do want to figure out, and this will be the management art that we have to figure out, and that is how do we begin to think differently about curating this content and formatting this content new ways we can get it to our customers in different ways, in different formats, and getting that seamlessly working across the two companies. That will be the management art we have to figure.

So tell me again, I mean, what we're talking about here is how what content is going to look like in five years and how together you guys can harness it and get it to people. But for consumers, you know, they want to, what's going to change for them? Their bill, you know, their phone bills, their cable bills, what is the biggest thing that they'll notice differently, you think?

I'll give you a classic example of this. You'll see this actually next month, and that is one thing we've been working on since we closed on the DirecTV acquisition is a purely over-the-top content package. We're calling it DirecTV Now. Right, this is a mobile-centric, purely over-the-top package that's going to our consumers. This is going to be a radically lower price point than what the consumer is expecting or has typically paid. And it's going to be a hundred plus channels. We're not talking channels that nobody watches, this is a hundred plus premium channels. All of this content will be on there, ESPN, the Disney content. This is a very, very different experience. Mobile-centric, is designed for the tablet and the smartphone. Now think about having an anchor tenant like Time Warner whose content is in here and HBO in that content and how you can begin to integrate social into this and social interaction and can we clip the content and send it to friends and interact with our friends on this. These are the kind of things that we, they're going to iterate much, much faster and change how the customer experiences content.

If let me ask you about your legacy at this company. I mean, you've, I mean, you've been, what are your thoughts, I guess?

AT&T and Time Warner. News and political reporter for CNN, reporting from Washington. Losing the world and seeing an appliance or cheese for the deal is beast. Jackie and Martha Levinson. Thank you, gentlemen.

So XO, that's Christine. Chris, all right, great interview. Christine, thank you very much. So what needs to happen for this AT&T Time Warner deal to come to fruition and what's the plus minus for you? Up next, our media experts will take you through the deal next.