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good morning, it is 10:00 a.m. at at&t headquarters in dallas, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ >> welcome to "squawk alley" for a monday morning, john ford and myself along with ceo terry and senior editor peter cofta. good morning to you both. our top story fairly obvious, at&t buying time warner for $85.4 million. a deal uniquely different than anything they've done before. regulators already raising red

flags, possibly putting an end to the deal before it begins. the senate and consumer rights is looking to schedule its first hearing on the merger next month, and it's not just washington, the competition also warning against the deal with one disney spokesperson saying, "a transaction of this magnitude obviously warrants close scrutiny." time warner ceo says the focus is vertical and mobile. >> we were talking about what's happening in media, all these new products like subscription v.o.d. networks, all the increase in mobile consumption of video, and as we got into it and were talking about what the media companies were doing, what the distribution companies need to do, we realize that if we had ourselves together, that we could create more innovations for consumers, so they can have more choices, going to end up with more competition, therefore, lower prices. >> shares of both companies moving lower on that news.

wow, there's a lot of skepticism up front. how high is this hill going to be, peter? >> i think at&t thinks it's a big hill, the breakup fee is a mere half a billion. when they tried to buy t-mobile the breakup was $4 million, signals at&t knows this is tough to get through. >> do you agree, terry? >> yeah, we learned, this is deja vu all over again and the last time there was a very extended period of time before close, and i think people, shareholders, are thinking this is going to take a while. >> but why? i know it's not popular to like big companies now and again these days, i think politicians can't come out this early and say i'm in favor of it in this environment, but these are two companies that don't compete. we're talking about vertical integration here, i'm getting into trader arguments people who say i don't want fewer options. what option is being eliminated by this? i don't see one. >> you've made their argument.

you know what this experience is like, comcast beat nbc universal and that is the case for that, they've already done this once. >> even in that case, comcast actually had monopoly power in cable in certain geographic areas. wireless is one of the most competitive spaces, and so is content. >> the difference here is comcast had a regional footprint, only affect customers in certain parts of the country, at&t can do this across the u.s. and for that matter in mexico, latin america. >> but it is a vertical integration deal. at the end of the day, do consumers have less choice? the competitive dynamics are different. going forward, mobile, video streams everywhere, the competition looks broader than just cable. it's google, facebook, amazon, netflix, and that is a wide berth for them to make that argument that this is far more competitive. >> as said this morning, i think netflix is going to be okay. he said i think amazon is going to make it in the end. you buy that? you buy their line? >> i do. i think this thing happens. will it take time, will there be

a lot of looking at it? absolutely. but at the end of the day, this deal goes through. >> there will be a ton of restrictions, the government will make it very hard, and the market will, as well, for at&t to treat their content or netflix's content any differently. >> you don't mean necessarily divestitures. >> might be, but the idea to pay less for "game of thrones" through at&t versus verizon or comcast, that's not going to happen and frankly a lot of folks are worried on a broadband wireless case they are going to treat that differently. so-called zero rating. >> but there is a risk in this environment because there's a mistrust of institutions of large companies that they just decide, you know, government decides we're not going to allow it and then sort of figures out a justification backwards, that our regulatory regime becomes more like europe's. even under the european regime which protects competitors, it's hard for me to construct --

>> comcast and time warner, but they are really the same deal, so sort of depends who's making the argument and what day. >> time warner cable charters you're saying. there's always a political undertone to these considerations and that's a function of the time. what period are we in, what era, what do politicians and policy makers have to make a stand about. >> a lot of discussion about what boou kas sees are different. are the challenges to the landscape more acute? why now? >> the price is that different. he hasn't changed fundamentally what time warner is doing. it's still the same company. it's still fundamentally the same company. this is as good as it's going to get, i'm out. >> and they are not selling@murdoch empire. i think that plays a lot into jeff buccas, a guy that's spent his entire career in the media industry. he was against the aol deal, for this deal. look at where the stock is. we may look back at this in five

years and say wow, good job jeff bewkes. >> any notion who moves next on either side, distribution or content side? >> this puts cbs in a bind, this is something he wanted to do for years, much rather do that than a vai ya come deal. you've been hearing for deals the amcs of the world on the content end are going to look for bigger owners, that's certainly going to intensify, as well. >> this morning's historic deal follows a string of moves into media, the largest did not work out as well as hoped. what does that say about the media strategy? julia watching that in los angeles today. hey, julia. >> hey, carl. at&t slooking to time warner, as you mentioned, vertical acquisition for growth and diversification after buying another distribution company, directv failed to jump start video subscriber growth. directv's modest gains failed to compensate for losses at at&t's uverse, resulting in the

company's net loss around 200,000 subscribers since at&t closed its acquisition of directv in july 2015, just as concerns about cord cutting in a new generation of cord-nevers was growing. now instead of buying another distributor, at&t is counting on buying one of its content suppliers to give it an advantage as it puts together more direct to consumer options, including a new over the top service directv now, which is in the works. at&t's ceo saying owning a content company will enable true innovation of new platforms and video experiences, while time warner ceo says at&t's data will be valuable to know what content to create and ads to better content consumers. at&t has already been investing in premium content. in the past month making exclusive deals with taylor swift, as well as garth brooks to offer their music and concerts to their customers. at&t partnered with peter turnen

two and a half years ago to create otter media, which owns youtube content creator network full screen and have a combined 1.2 million paying subscribers. while buying directv showed at&t's confidence in the tv bundle, buying time warner is a bet its content assets will be appealing across all platforms and a la carte. guys? >> julia boorstin thank you very much for that, julia. one thing is for sure, when the deals are denied, it hurts. it's hurt players for years. that's a lesson absorbed and learned? >> sure, but you're not going to get over the finish line unless you cut the deal and announce it. i think they are giving this the college try. like i said, i think this deal goes through. >> peter, this combined company would have tremendous insight into where people are and when they like. that's what google's got already, facebook's got some of it, too. >> netflix. >> well, netflix probably less

into where they are. >> part of the argument here is addressable content, addressable ads, make the fantastic ads where we know who you are and what you're doing. the industry has been promising this for years, one day it might happen, don't know. the netflix idea is happening now, which is we know what you're watching, we're going to give you more of what you want and use that information to buy more of what you want. that's happening today. that's a realistic goal. >> netflix doesn't know where i am in manhattan at 2:00 p.m. and have an ad strategy. >> we've been waiting for that scenario to pan out for years. one day it might happen. >> i think the data play is an interesting one, especially to see how they treat the known data about their known users on the at&t network and what will be allowed from a privacy standpoint, but at the end of the day this is a lot about defense, distribution companies making a bet in content as distribution changes and changes dramatically, so we saw it with

comcast and nbc, so, you know, you could call that a pair of queens. then along comes verizon. jack hie maybe and at&t is hoping this is a mitt full of aces. >> do you believe the price action today in google and facebook at all-time highs is related to any of this, and if so, why? >> i doubt it. >> i'm not making that bet, but if you're google and facebook, you feel okay today. if your core business today is still selling advertising, this doesn't threaten that. >> right. fascinating. we're going to have this one to kick around if a while. peter, terry, thank you very much. >> thank you. >> when we come back, tim cook and company on the hot seat when they report earnings tomorrow. why some on the street are warning apple's win streak could be coming to an end. later on, they prefer to work in the shadows, but executives at some of the biggest private companies are breaking their silence when it comes to the election and their

donati donations. plus, more on this morning's deal, analysis you don't want to miss when "squawk alley" continues in a moment. ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person,

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apple stock has been on a tear recently, but can ceo tim cook keep that momentum? josh in san francisco is going to take a look. josh? >> well, john, over the past three months apple stock has now surged nearly 20%, so when the

tech giant reports tomorrow, the streets going to be on the lookout here for a few big themes. one, apple will give us guidance for its december quarter, and that will be the first real read on demand for those new iphone 7 models. investors want to know whether the 7 can return this iphone franchise to growth. pipers jean munstrom notes there are 275 million active phones older than the 6, so how many of those users will upgrade, and when they do, are they moving to the iphone 7 plus models? and rival samsung's big blunder with its note7 could provide a tail wind for apple. can cook capitalize on samsung's pain and gain share in that super premium smartphone category? expect a lot of interest in apple's business in china, too. remember when apple last reported that region's revenue dropped more than 30%? cook pinned that pressure on slower economic growth and currency headwinds, but bulls

want reassurance there isn't something structurally wrong with the business. for example, why more chinese consumers simply moving to chinese brands than most attractive features and cheaper prices. and finally, it's not just hardware, apple makes a lot of money from services, too. in q3, that business, which includes the app store and music, grew 19% to $6 billion. that's a relatively small part of apple's total revenue, but investors appreciate its fast growth and high margins. cook said services will be the size of a fortune 100 company next year. we're going to find out tomorrow if that forecast is still on track. john, back to you. >> all right, thank you, josh. we're going to stick with apple for a moment. mixed panel tracks the actions users take in web and mobile applications and gathered analytics on apple users and are going to share that with us today. ceo of mixed panel joins us now. good to see you. >> good to see you, john. >> so, what can you tell us

about ios 10 and the adoption there, versus ios 9? this, of course, important to apple because it makes the argument to developers it's going to be easier to build apps on our platform and work with the latest features. how does it look? >> yeah, the best thing to do is actually to compare ios amongst users against android, and what we usually see with android is it's heavily fragmented. to give you an example, when ios 10 was launched, it's now more than 70% of people that use ios actually use ios 10, whereas the remaining is either ios 9 or some older version of ios. >> are you able to get insight into how many people have adopted the iphone 7 and 7 plus versus, say, the se, which is also relatively new in this cycle? how's the mix look for apple thus far? >> yeah, typically when you look at iphones, they are typically

adopted a bit slower than, say, users adopting an operating system, mostly because you can simply upgrade. it's easy, whereas you have to buy an iphone. right now the way we see it is about 10% of global usage ends up being people that use an iphone 7 or iphone 7 plus compared to the rest of the older iphones that are available for sale right now. >> and for a month or so into this cycle, is 10% pretty good? can you compare that to last year's cycle or the year before? >> yeah, 10%'s pretty good. i think that in previous years sometimes it can be slower, but this year's pretty good. also a note that it's a whole new version, it's not just iphone 6 going to iphone 6s or something like that, so that means a lot to consumers. >> a lot of discussion last week whether or not the samsung problem was big enough for people to overcome their hesitancy to switch ecosoystems.

i wonder if you think that's true. >> yeah, i think it's not just samsung. i actually think it's a combination of the iphone 7, in addition to google's newly launched phone, which is the pixel, so a lot of people are saying they are going to switch to one of those phones. >> so what are you seeing in terms of people's reaction to various news about hacking? we had yahoo! come out in its earnings report and say, look, when we announced the hacking problem, people engaged more and there was speculation they were going on to change their passwords. have you seen a shift in patterns on mobile networks based on some of these very well publicized bouts of hacking that we've reported so much about? >> well, i've never seen a product actually increase in usage as a result of a hack. generally, you have to log people out or change their passwords, but usually you'll see decrease. mobile is certainly an area where there's a threat.

i think mobile is brand new, so a lot of people don't know yet what the vulnerabilities that exist on mobile might be, so i think it will require some time before we're able to know. >> all right. suhail, ceo of mixed panel, thanks for being with us. >> thank you, john. when we come back this morning, why ceos of some of the biggest private companies are breaking their silence and opening up their wallets. we'll break that down. first, shares of amazon getting a boost this morning. analysts at goldman sachs hiking their target from 920 up to 1050, citing performance in retail and growth in web services. we'll talk about that when "squawk alley" comes back. they may want the latest products and services, but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models...

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from starbucks howard schultz to hp's meg whitman, ceos have weighed in on the election, but there's a huge group of private ceos who prefer to work and donate behind the scenes. kate kelly has details on that. hey, kate. >> hey, carl. it's definitely true some well known names have spoken out on behalf of hillary clinton and fewer perhaps have advocated publicly for donald trump, but when it comes to the big money donors, we got a lower profile roster on both sides of the aisle than usual this cycle. take a look at some of the givers top five in dollar terms in terms of their support for either candidate, according to totals from the center for responsive politics. fairly known quantities, but donald sussman is number three with $32 million to democratic causes, a big chunk having gone to priorities usa, the

clinton-supporting super pac. part of his object is to get the money out of politics in a bipartisan way. bob mercer gave much to ted cruz, but this summer he and his politically active daughter rebecca pivoted to donald trump, helping shake up their campaign staffing, as well as donating millions to the candidate. mercer, a mathematician and co-ceo rarely speaks publicly. in fact, during a 2014 award acceptance speech that lasted 45 minutes, he said that's typically more than he talks in a month. the sixth biggest donor not pictured is fred icahner of news web in chicago. a supporter of causes related to gay rights, as well as supporter of hillary clinton, his company lacks a website, even his phone number can be hard to find, but he's put over $20 million towards democratic causes, ranking him just a hair's breadth away from paul singer, the conservative hedge fund

manager. some people you may not have heard much about really reshaping the landscape. >> yes, indeed, their money speaks loudly. kate kelly, thanks for that. still to come on "squawk alley," why this morning's at&t/time warner tie-up might be just the beginning, or is it the middle? and later, former president jeff liu, is the more than $85 billion price tag worth it? the answers when "squawk alley" returns. hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade.

good morning once again, everybody, i'm sue herrera. here's your cnbc update at this hour. early veoting is under way in florida. 50 counties open up polling places around the crucial battleground state today as clinton and trump ascend on the sunshine state. more than 1.2 million voters have already mailed in their ballots. former attorney general in court today to learn whether she'll go to prison over perjury and obstruction charges. kathleen kane told the judge she's embarrassed by the case and wants to go home to her teenaged children. security is tight in beijing for a key communist party meeting. the gathering of more than 350 central committee members is the sixth such event since president xi jinping was elected by the party four years ago.

parade through the capital city, women of all ages who are elegant, colorful dresses ahead of that country's famous day of the dead celebrations. that's the news update this hour, back downtown to "squawk alley." carl, over to you. >> sue, thanks so much, our sue herrera. we're going to get the close here in europe and across the continent in a few seconds. hey, seema. >> european stocks mostly higher to begin the week with spain outperforming its peers as ten months of government impasse has now come to an end. that's lifting sentiment. economic data also helping investors today. european composite pmi coming in stronger than expected to a ten-month high of 53.7. germany's really leading the expansion with a second largest monthly increase of the year, while growth in france, interestingly enough, slowed down. sin gen that down sharply in swiss trade after the seeds company missed the deadline to submit antitrust remedies

related to their deal. the concessions is a key part to approve what would be china's biggest acquisition ever. meantime, the german government has withdrawn an approval of the takeover of aix tron, the decision coming amid a backlash against chinese investments into germany. shares down about 13% on the day. also in focus, fish, the credit rating placing tobacco on a watch negative in response to the company's offer to acquire reynolds american. and lastly, keep a close eye on monte paschi on speculation the ceo will outline a detailed plan for recapitalizing the troubled lender. remember, this is monte paschi seen as the weakest lender in europe, sitting on a lot of bad loans. that could lift sentiment in general for the broader european banking sector. again, that stock on the move

today. john, back over to you. >> all right, thank you, seema. and back to our top story and the mega deal of the morning, at&t trying to buy time warner for $85.4 billion. this move just the latest in a string of telcos making major moves into the content space, a trend likely to continue. out west with more, deidre? >> good morning, john. telcos didn't used to compete much with tech giants like google, amazon, and facebook, but now they are competing for content and also in the bread and butter distribution business. google fiber is providing ultra high speed internet service in nine cities, with four more planned. amazon wants to become an internet provider in europe and facebook is building telco gear. a number of companies from microsoft to google rather than pay for undersea cables are laying their own cables to satisfy their own needs, so companies like at&t and verizon are going up against big tech with deep pockets and a

willingness to invest. back when comcast attempted to buy time warner cable it cited tech companies as the reason the deal should be approved. in a public interest benefits summary letter it wrote, "a number of online businesses like apple, google, amazon, hulu, netflix and a host of smaller companies are entering the online video space and trying to position themselves as competitors." at&t's bid for time warner is the latest example of telco trying to compete in this landscape, verizon is exiting less than $10 billion to buy aol and yahoo!. if any of the latest deals fall through, apple, amazon, or google may be waiting in the wings, back to you. >> you never know. those names come up a lot because they can buy a lot of things. thank you. and for more on at&t and time warner, let's bring in lar lar larry haverty and steve cahill.

good morning. >> hi, carl. >> steve, i want to start with you. this is john. tell me, what do you see as the advantages of this tie-up? a lot is being talked about whether it will even get approved at all, but what are the core advantages and then how do you handicap the likelihood of it happening? >> i think there's two core advantages that at&t is looking for here. i think the first comes down to cross product selling. it's not tough to manage a world where internet, phone, and content will be unified from a product standpoint, so i think their ability to offer consumers deals across all three channels with at&t, directv, and time warner's content portfolio is quite compelling. i think the second benefit is advertising, and particularly with the growth in dynamic advertising and the market share from facebook and google, at&t says its digital platform is a place where it will have a lot of data about content users and

what types of content they watch and should enable it to provide new volumes of advertising at very, very high rates. >> and, steven, sorry, larry, what do you think is the strongest argument against this tie-up and is it likely to succeed that negative argument, that is? >> well, i think the strongest argument against it is the emotional argument that this is politically incorrect at this time. i was astounded mr. trump came out against it so quickly and thinking if i'm hillary, how can i position myself to be less favorable towards big business than mr. trump, because certainly bernie sanders will be upset to say nothing of the liberal part of the democratic party, so i guess this transaction makes all the sense in the world economically, carl. the question is, in this environment, is it politically viable, and i think the market's

raising question marks because this albatross spread on the deal, even if you assume a 15-month playout, which i think is highly likely, is very, very large. that's a big risk. >> yeah, steven, you seem to believe the fcc will be interested, but doubtful to block. you say a conditional deal is achievable. why and what has to happen to make it happen? >> well, to take on the previous point, i do think we're in a heightened political atmosphere at the moment, but i'm of the view by next spring that could change a lot. certainly some of the characters we're hearing from today who have a strong voice in media, their voices may not be so strong once we move past this election fervor and into a normal political period when the new president takes office. i'd say the second view is there is a lot of differences here between horizontal integration and vertical integration and the fact you're not taking a single industry competitor out of the market to me is what makes me

optimistic of the deal, will be approved. i would expect there to be something like consent decree like comcast had with nbc, but i think at&t is going into that discussion with eyes wide open and knows what it's going to have to agree to in order for a merger to go through. >> larry, we've been trying to handicap bewkes' ability to garner a rich multiple and whether or not this is ticking the landscape overall. when you look back to his previous hesitance to accept fox's deal, is the price here or at least the enterprise value that different? >> no, i think there's a big difference and i think jeff's doing something that people don't pay him like myself to do, but i think it's very important and it signifies in my opinion great leadership. there's no question in my mind, carl, that the fox deal would have been a slash and burn kind of thing that probably one of the two studios would have been closed or moved. a lot of people would lose their

jobs. in this situation, jeff is protecting all of the jobs. he is basically moving into a company where in addition he gets a stronger balance sheet and i think that's one of the great selling points of the proposition. you have the ability to intelligently use at&t's financial capabilities at the lowest interest cost, basically, in modern business history and if you can do this and still maintain that investment, why shouldn't you do it? then, jeff, i think it's a big, big call option on mobility, and if you look at the great stocks in the market over the last five years, i call them the five horsemen of the apocalypse, or the digital apocalypse, ten cent alibaba in china, and google, facebook, and apple here, all five have one thing in common, they have embraced mobility and i think jeff is getting a situation where he can, for his

shareholders, get into a situation where he gets an absolutely one of the best seats in the house, seeing how this mobility thing develops and at&t gets a situation where they buy one of the great curators of content, the demand for content is just going up. >> we have to leave it there. larry, steve, thanks so much. it's a story we're going to continue to talk about, because this wasn't isn't going to be finished soon. larry haverty and steve, thank you. when we come back, this morning's deal, a multimillion dollar bet on mobile, as larry just said. what the president of huawei says, jeff liu. and kara swisher is on deck. why she says the ghost of aol will offer the time warner deal when "squawk alley" comes back.

coming up today, bill miller of lmn investments is with us for the hour. he's beaten 99% of his peers over the last five years. we'll find out where he sees opportunity today. plus, housing expert's top picks in that space. "half-time" starts at the top of the hour. see you in less than 20 minutes. >> sounds good, scott. meanwhile, a new iphone 7, burning samsung and google pixel, the smartphone battle is heating up. this morning we heard from randall stephenson on the importance of mobility as he announced the deal with time

warner. >> so, what does change, why put the two companies together? it gets back to what jeff said, speed. all right, this thing, 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. >> joining us now is jeff liu, ceo and former huawei president. jeff, thank you for joining us. >> my pleasure. >> i want to ask you about the shape of the smartphone market right now, particularly in the u.s., where you have big ambitions, so do a lot of other manufacturers based in greater china. how do you think the strength of the iphone 7, relative to expectations, and this fiasco with samsung's galaxy note7 affect the landscape for you?

>> the chance for the smartphone industry globally, right? >> sure, globally, but mostly in the u.s. >> okay, i see. as everybody knows, the smartphone is very popular and the competition still very tough. and the global players, apple number one, samsung, and lg, but as everyone knows, hong kong company and also we want to provide the different shares, production and services to the u.s. for us, the u.s. and china is very important market for chinese manufacturers, so we hope we can get more business here, and we think of smartphones will be more smart now and in the future, and the

a.i. and a.r. technology will combine with the smartphone to provide a more successful business for everyone. >> jeff, does it make sense for carriers to buy content companies, talking globally here, we, of course, have this deal in the u.s. that's pending. at&t trying to buy time warner. does that make sense? >> yeah. i think it's a big deal, so we think for the telco, the telecommunication operator, they don't just want to be the pipeline for information, they want to get the information by themselves, so in the future for the internet or the mobile network, the content and the video will become more popular, so i think that's why.

>> well, thank you for the insight. jeff liu, coolpad ceo, former huawei president. >> thank you. when we come back this morning, kara swisher wrote the book on time warner's deal with aol. she's going to join us in a moment. meanwhile, watch shares of microsoft, its $26 million deal to buy linkedin getting intense review from e.u. regulators. although all-time high today once again. more "squawk alley" in a moment. t i.t. orchestration to a global outerwear manufacturer, allowing them to handle the recent popularity boom in fanny packs. it's pretty fly. unless being '90s is your thing. well, cdw and hpe services gave them the flexibility they needed to scale up their scale up their cloud resources, making sure supply meets demand. poser! [ classic ringtone ] what's crack-a-lackin'? hey, did you remember to set the vcr? increased flexibiilty by hpe services. i.t. orchestration by cdw.

is the ghost of aol coming back to haunt the time warner deal? kara swisher explores that in her latest article and joins us to dig in on what a merger like this might mean. editor and chief of recode. good morning, kara. >> hi, how are you doing? >> good. man, what a column from you today. >> yeah. >> a lot of the things that you heard back then, you're hearing once again. what does that mean? >> well, you know, in the lead of a press release and you saw it 15 years ago with the same problems, you kind of wonder what's going on. >> what is going on? >> well, you know, i think one of the issues that i was trying to bring up was giving people a little history lesson, which i'm

so old, which i am, carl, i've been around for a lot of this. and one of the things i wanted to point out was jeff bewkes, ceo of time warner, and who ran hbo were very much against the aol/time warner deal at the time it happened, one of the big parts is for different cultures to come together. you know, phone companies not that much different from an internet company, and how this company is now going to cope with the differences that they have. >> cara, it seems like back then in 2000 the argument about time warner was here is this old school media bohemath that doesn't have a great answer for digital. the argument these days has changed. with the rise of netflix, with amazon getting more into purchasing content, we're talking about being in a content golden age. how does that change the way people are looking at this deal? >> i guess i still think they

didn't get digital. that's why they're selling. they could have done netflix. they could have donnie number of these things. they could have done lots and lots of the internet efforts in the context space. >> the aol people -- conceptually the idea was dead on correct, which is combining distribution and content. can you imagine what they could have done if they behaved better. >> i guess i would argue there's no way you could discount the cultural challenges, how these things will fit together, but i think it's really important to also figure out the financial side of it.

here's what happened last time. time warner trade the the entire company for 45% of this new company chrks which was basically trading it for internet bubble script, which is aol's stock. that set the bar at a certain place for how much this sort of sen erjyist vision had to come about. right now you have at&t effectively buying one of its suppliers. they operated on the same food chain. it's not a monumental valuation. there were companies that really grew into their valuation. >> i guess. again, they were there. they had the right idea then. the question is could they have put it together. now i think the big issue, there wasn't mobile then, right? you don't even think about it. mark zuckzuckerberg was a tenth

grader. i'm not saying it's not -- you know, it got killed by execution and timing. absolutely. i don't know how to put it. they still have the same cultural issues. no matter how you slice it, hbo now works with the phone company. right? the question is can the phone company help them move into the digital future when literally if you go back in the history of time warner, it's one digital disaster after the next. starting with path finder, if you remember that, says if you are as old as i am. moving on -- then moving on down the line. they could have created net flick or this -- this is a company that made hbo, which is fantastic, and then blew the opportunity at hbo for a long, long time before they actually put it on-line.

you have come to for years where you argue big companies are buying smaller companies. others being dressed up for sale. obviously at a much lower market cap. is this the starting gun for m&a becoming the leading dynamic in media? >> i don't know if it's a starting gun. i mean, there's been a bunk of it. yahoo. twitter was on the market. you know, i think i started talking about this six months ago. now is the time when everything gets sucked up. i think you're going to see a ton of these kind of consolidations. there's a lot of companies, you know, netflix is one that i'm sure a lot of people are looking at. even though they may not want to sell. there's tons and tons of opportunities now to really suck up all the great properties. will the next government,ing whichever side wins, tolerate

this? already tim kaine has been raising his very lovely eyebrows about the deal. you wonder what the clinton administration will do. it will be a fascinating time. the last part is when google and apple get in here, if they get in here. that will make it super interesting to me. >> i just wonder if there's anything that a telco can do that people won't hate. if google were doing this. disclosure, we work for a telco, comcast. this is not an anti-trust case in the classic sense. so many people are saying i hate, it it's going to be hard. it's not going to happen. >> you wouldn't have as many people immediately assuming this was a scheme to have you swallow up your data plan faster. right? >> and they -- >> it would be different, right? >> kara, last word. >> google and microsoft would make terrible acquisition deals. they've blown a bunch of them. nobody is that good at these things, and they're really hard. you know, i think -- i really have some admiration for -- i

think it's a big move, and it's a smart move. it's very similar to the comcast deal. you know, the cable guys and the telco guys are getting smart, i guess. >> they definitely have their work cut out for them for the next year or so. kara, we look forward to talking more about it with you. thanks. kara swisher joining us along with mark san tolly here at post nine. t-mobile with results before the bell that impressed the street. stock up. you'll hear what he had to say after a break. what's the value of capital? what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

take a listen. >> they're going to be very distracted. well, first of all, they already donate 50% of all my customer growth. they're going to be even more distracted and focused on this. by the way, within five minutes i'll be a bigger wireless company than they are to begin with. it will accelerate our growth where highly profitable moving in this, and i own 70 million customers and growing that i profitably manage on the fastest lt network that i'm moving to 5g. my role in this game of how you do this is going up all the time.

it's very exciting on the short-term and long-term for our company. >> easy for john to smile when you are leading the competition if post paid and ads. >> that's the game. right there. interesting that you didn't take the opportunity to shoot at this. >> it's always good to keep your options open. >> that's right. we'll see what john says in the days to come. meanwhile, bill miller on the half. let's get over to wapner back at hq. >> the top trade this hour to buy or bail on the s&p. stocks higher today, as you know, on this big erj manier monday. what are the best plays for your money right now? with us for the hour today is bill miller. he is the chairman and chief investment officer of lmn investments. we also have joe terra nova, steve weiss, josh brown with us as well. housing expert ivy zellman along in a bit. let's kick things off and get bill miller's view. it's good to have you here. in september in delivering alpha,