today. i am sorry. this was the right decision but i think it is right that we have a public inquiry and have public investigation. yesterday, it showed that that one is above the law in this country. >> mr. speaker, today we know that for four years, the prime minister has hand picked closest advisor was a criminal and brought disgrace to downingstreet. we now also know that the prime minister willfully ignored multiple warnings about him. on the 8th of july, 2009, the guardian published evident of phone hacking on an industrial scale when couldon was editor of the news of the world. at that time couldon was his

director of communications. what actions did he take. >> as i said a moment ago, the assurances that i received were the same that i received by the press complaints commission, by police investigations. they were also thoroughly gone into by the levison inquiry, an inquiry i supported. specifically -- he talks about warnings -- specifically on the warning from the guardian. levison said this. the editor of the guardian did not raise the issue with mr. cameron at meetings both in the month after the article was published and the following year. he says this. he says this. honorable members want to hear. there can be no criticism of mr. cameron for not raising the issue. we had an exhaustive inquiry. i know he didn't like the result of the inquiry but he should accept it. >> mr. speaker, that is a lo

long-winded way of saying when it come to couldon, he didn't want to know the evidence. first warning ignored. let's move onto may 2010. the deputy prime minister warned him in person about his deep concerns about andy couldon. so he was warned by his deputy. what action did he take? every single one of those issues was dealt with by the levison inquiry. >> order, order. mr. lucas, calm yourself. i am trying to offer you on a weekly basis. thee thee . pe therapeutic guidance. the terms were agreed by the honorable gentlemen and they included, i quote, the extent to which there was a failure to act on previous warnings about media

misconduct. that is what levison looked into. all the questions about the warnings i was given and the response that i gave and he made no chrriticism of my conduct. i know the gentlemen were disappointed by the inquiry, he called for it. it took place and he should heed what it says. >> no, mr. speaker. this is about his character, his judgment, and the warnings he ignored including from the deputy prime minister. warning number two ignored. than in september, 2010. the new york times published a front page investigation detailing andy couldon's extensive knowledge of phone hacking, including one forrer editor who said i've been to dozens, if not hundreds of meetings when it came up. what action did he takitious all of these issues, sever warning

was dealt with the levison inquiry which is what he called for and agreed to. levison made no criticism of my conduct in this regard whatsoever. now, you cannot call for a judge led inquiry, participate in it and write the terms of reference of it and then ignore what it has to say. i have to say mr. speaker, all of the questions he is raising today are not new. they are the questions dealt with by the levison inquiry. the prime minister is offering an answer and it must be heard. order. it must be heard by the house. both sides must be heard by the house and that will happen as it always does, however long this session has to be run. let us be absolutely clear. the prime minister. >> i can quite understand why he doesn't want to listen to an eighth month long inquiry that

last 5 million pounds that was led by a judge and interviewed people under oath. that is what he asked for. it was what was delivered and did not cast zburdispersians on conduct at all. no answer why he didn't act on the guardian or the deputy prime minister. no answer why he didn't act on the new york times. now, let's come to the issue of vetting mr. speaker. amidst all of the warnings, the apologized i did -- i apologize, be quiet. if you can't be quiet, leave the chamber. we can perfectly manage without you. let's come to the vetting mr. speaker. >> amidst all of those warnings, the very least he should have

done is insisting on coming to office. he should have the highest level of security vetting. why didn't he insist it. >> levison looked directly into this issue, mr. speaker. this is what he found. this is what he found. levison concluded this. the level of security clearance was not the decision of either mr. camer cameron it was the de of the civil service. those are the correct -- those are the correct procedures. those are the correct procedures. but if the leader of the opposition's contention -- if the leader of the opposition's contention was that direct vetting could have gotten to the bottom of couldon's conduct at

the news of the world then he should be clear about what levison found. he found this. the process of considering mr. couldon for dv status would not have involved a detailed investigation, a phone hacking of the news at the world. that undermines the entire case that they had been trying to make all warning. i know you don't agree with it. i know he is so desperate not to talk about the economy or unemployment, not it atalk about the deficit but you can't rerun an inquiry that's already taken place. >> mr. speaker, so now it is clear from the prime minister -- now it is clear from the prime minister. i will tell him, it is failing for standing up and doing the right thing. that is what the prime minister has done. so now we know the rule of this prime minister is the buck doesn't stop here and he blames the civil service.

now, on the civil service, can he -- order. >> sometimes one has to repeat a thing because people don't get it first time. if there is quiet, we will continue. if people try to shout other people down against the principles of british tem democ they will be stopped in their tracks. >> cancan h he assure the house he raised concerns with any senior staff about hiring him. >> he was made it clear that and deed on the issue of vetting, he was absolute clear that the decision about vetting was absolutely clear what the right

honorable gentleman is trying to do is go through all of the old questions that were answered by the levison inquiry. he didn't like the answer because he wanted to try and prove some cooked up conspiracy between the conservatives and news international. he cannot manage to do so because the levison can't find it. now, he asked a minute ago what is week? i will tell you what is week, i attacking attacki attacking murdokc attacking the newspaper and then apologizing only a few hours later. >> mr. speaker, the prime minister said in his previous answer that sir gus oe donald was asked whether he raised concerns with him or his office about andy couldon. he was not asked that question at the levison inquiry.

there is an important question about whether mr. gus donnald or senior servants raised concerns about him? the truth is the charge against the prime minister is not one of ignorance, it's willful negligence. at the heart of this scandal are thousands of innocent victims of phone hacking he didn't stand up for. the prime minister will always be remembered as someone who brought a criminal into downings street. >> he brought up the issue from the guardian. i totally disproved him with the evidence. he brought up the idea of vetting, i totally disproved him with evidence. he cannot bare the fact that an eight month inquiry found that i

behaved correctly throughout. that is the case. all of these issues were examined by the levison inquiry. if he wants to debate the calls we make and leadership we give, i am happy any time. this is leadership that has gotten this economy moving. this is leadership that has gotten this deficit down an putting britain back to work. this is the absence from the labor party that shows that they have nothing to say about britain's economic future. >> jay berry. mr. berry, not here. mr. elfin cluid.

>> thank you very much. after months of rhetoric, now a sudden change of heart. does the prime minister believe that the enemy is my friend trumps all else? >> no, i don't believe that. i think we should judge every regime and every organization on its commitment to human rights, the rule of law and building pluralistic societies. we should engage with the iranians with a clear eye and hard heart. we shouldn't what happened to our ex-bassy. we shouldn't forget the things that they are responsible for around the world. we should start to build a dialogue with them in the way the foreign secretary set out. >> thank you mr. speaker. on friday, my honorable friend and myself jumped from a plane 13,000 feet over the country

side. fortunately we had a parachute and training from the tiger army parachute display team. as we approach arm forces day, will the prime minister pay tribute to our armed forces and the charities and generosity of the british people who do so much to support those who give so much commitment to queen and country? and will he reinforce the fact that this parliament will never underestimate the contribution of the armed forces of this country? >> i absolutely support what my honorable friend has says and i commend him for jumping out of an airplane with a parachute. it is right that we put the military covenant into the law of the land. armed forces say is now an important part. we remember those who have served and fallen and it is an

opportunity to celebrate all who served today, to thank you them and their families. to celebrate the values they live by, et cetera. >> does the prime minister realize he's made history. >> well obviously i regret the decision on the basis of the assurances that i was given. i will say that no one made any complaints about the conduct of andy couldon while he was at number ten. that does stand in quite a contrast to the conduct of mcbride, to joe moore and campbell. what we had from the previous government was smearing members of the parliament. >> mr. speaker, the fire fighters despite continues with

some worrying consequences and no sign at present of a resolution. mr. speaker, back from easter, dclg ministers got them to kaft set of proposals that it was ready to put to its members. will the prime minister look back at that proposal even now and consider whether it might have some useful part to play in bringing an end to some dispute? >> i'm very happy to look at what my honorable remember that's been working extremely hard on this issue. i think it is important to listen to what the fire fighters have to say but also the pensions that they have access to would also require the building of a half million pound pot for anyone else in the country. we should bare that in mind and the taxpayer's contribution at the same time. >> does the prime minister accept that his death at 60

proves that jay conlin lost more than 15 years in prison and that the anguish of his father's live in prison, as well as the campaigning against injustice there were two particular issues that mattered to jerry. one is the need for properly quality, mental health services for those who surfed miscarriages of justice and secondly, not withstanding the egregious 75 year, jerry was recently promised access to the archives and that people could accompany him. it was his dying wish that that would be honored through the people he wanted to accommodate him. will the prime minister ensure that that is honored. >> first of all i'm grateful to the honorable gentleman in raising this. it is hard to think what 15 years in prison when you're

innocent of being convicted from a crime who do to somebody. i think it is right that the previous prime minister apologized when it came back. >> mr. peter bone. >> mr. speaker, unemployment in north ham p inshire is down by a third. last week the conservative government approved the russian lake development. 2,000 new jobs, major retail park, and a fantastic new facility. could the prime minister explain how we have this success. could it be down to his economic plan. >> i'm grateful to my honorable plan in detailing what is happening in terms of the extra jobs and development. i think what it does prove is

that we have key developments that need to go ahead to unlock the growth and investment that we need this it country. >> the prime minister said yesterday that he was just giving andy gocouldon a second chance. that means that the prime minister knew that there was a first offense and he knew from the very beginning that he was taking it criminal into downing street and then he refused to sack him and yesterday and again today he was busy praising him. isn't it the truth of the matter that the prime minister is only sorry because he got caught? >> i'm afraid that on this issue, the honorable gentleman has got it wrong time and time and time again. what i said about giving someone -- what i said about giving someone a second chance is because the individual question had resigned as the editor of the news of the world

because what had happened. let me just refer to what he says in this house of commons. after eights of an inquiry that got 5 million pounds. it turned out to be complete and absolute rubbish. have we ever heard of such a word? >> mr. speaker, might i congratulate my honorable friend on his judgment and resolution in standing up for britain's national interest over the question of the presidency of the eu commission. >> can i put it to him that he is in tune with the concerns of the public right across europe unlike so many of our continental partners. >> i think it is important to stand up for what you believe

in. >> i believe the president should be chose ep on the heads of the state on the european counsel. that is the right approach and it is wrong to sign onto this. i think it is important that the people understand that we need reform in europe. it doesn't matter how hard i have to push this case, i will take it all the way to the end. >> mr. speaker, they've been to breakfast with boris, had tea at number ten and are dancing with the business secretary but still businesses and shortage in the city cannot get superfast broad band. this is now a national embarrassment. what is the prime minister going to do? >> well, we have put a huge amount of money into expanding superfast broad band. we are now doing bitter than other european counted r countries. my hon yarable friend is working

hard that they don't have broad band and make sure they have it active on their list, the prime minister recruited couldon in 2007. in 2009 someone came to the committee and said i have never seen a piece of paper linking him to the activity we're describing. in february of 2010 they concluded that we have seen no evident that andy couldon knew that phone hacking was taking place. would the prime minister now agree with me that those who now climb who he was in 2007 should explain why they didn't pass that information onto the police or the select committee. weren't they trying to deflect leadership from their own shortcomings? i think my honorable friend put it rather better than i did.

thank you. mr. david simpson. >> thank you, mr. speaker. i'm sure the prime minister and the whole house will join with me and welcoming a very successful visit by her majesty the queen. will the visit also join with me in condemning their foolish approach to well fair reform which is not protecting the vulnerable in northern ireland but is costing the northern ireland executive 5 million pounds per month in fines. >> well, i agree with the honorable gentleman on both sides. the queen's visit to northern ireland has been a huge success and has highlighted thing that's are taking place with more than 800 foreign investors.

can i say i am extremely jealous of her majesty being able to stair at the iron throwns and meet the cast of game of thrones which is hosted in northern ireland. he is also right about well fair reform. the point is to help people get back to work rather than just to cut budgets. we need to explain that we should be engaging in well fair reform to help get people back to work. >> thank you mr. speaker. on than side of the house we have a long term economic plan with education funding at its heart and both as a consequence which is seen in the enhanced 269 pounds that all students will get next april. does the prime minister agree with me that we need to continue that progress on ed indication funding. >> my honorable friend is

absolutely right that the ed indication and better schools and skills are absolutely the heart of our long term economic plan. we're spending $8 million plan specifically on the esh u of a fair nags funding formula we have made some progress by allocating 350 million pounds to the least funded authorities that will make a real difference in the coming year. >> thank you mr. speaker. on monday morning before boarding the 9:00 train to london. i joined the packet line from pcs to union to protest against closures of hmrc offices and protect the terms and conditions. their main concern was that they felt it was a government plan for privatization of hmrc. can the prime minister assure

that there are no such plans under his watch? >> the plan we have for hmrc so make it more efficient and effective at cleskting taxes at people who should be paying them. >> thank you mr. speaker. on sunday 17-year-old tragically drowned. his death was left his family, friends and local community in shock. as this week is drowning prevention week, what can the prime minister do to raise awareness of the dangers of open water and improve water safety during such a warm summer that we're having at the moment. his heart goes out to the family that he mentions. he is absolutely right. for anyone who lose a son in such a tragic way as this is absolutely heart breaking. i think we do need to spread the dangers swimming in open water. i think we need to do more to

teach life saving skills. i also think the heroism we're bringing forward for people who want to do good and rescue people will help in a small way as well. >> mr. speaker, hundreds of young british men and some women are now fighting in syria and now with isis in iraq. some of them will come back to the united kingdom, trained, radicalized and ready to attack. our program has been cut, will the prime minister undertake an urgent review of the programs review to make sure we have the plans and resources to protect our young people from the extremists? >> i have great respect because she's always spoken clearly about the need not just violent veem extremism. what whiff done is to make sure

the government is properly foesked. we need to make sure we are search services to target those returning from syria and iraq so that they are properly dealt with. they have made a large number of arrests and confiscated passports and taken all the actions necessary to keep our country safe. >> annette brooke. >> thank you mr. speaker. julius house, a wonderful children's hospice is currently out research with a university into the impact of short rates on family relationships. will the prime minister give higher priority to the funding of short breaks as an investor measure u i absolute lly agree with that measure. i will never forget in the first children's hospice in the

country that it is a complete life safer for families and carries out brilliant work that's why we've committed over $800 billion and i'm sure this research will help inform our work in the future. >> mr. speaker sutcliff. >> i wonder if the prime minister is aware of the alleged misselling of cash back warrants. i wonder that one of the uk's largest utilities companies have refused to pay back to certain areas, many of whom are the poorest in our society, i command him for raising this issue. this took place over a decade ago. this was looked at in the department of trade and industry. for the outcome of the liquidation, i encourage him to

give the business department all the information that has come to light and i will fix a meeting to we can get to the bottom of this issue. >> my constituent michael butcher installed cctv in his mother's flat because she was a dementia sufferer. he recorded a brutal assault on her by her kayer. unbelievable to me, the cps has refused to prosecute her because they say it is not in the public interest. with my right honorable friend saying as a society we should be totally intolerant on vulnerable people with dementia. on the general point about is it right that we're intolerant of breaches of care against elderly care, particularly those with dementia, yes we should be intolerant to that. our strategy is not about just

increasing the chees but making sure our communities become more dementia friendly. >> mr. speaker, did guz odonnel, raise directly with the prime minister any concern. >> a number of senior civil servants gave evident to the levison inquiry and were closely questioned by levison. the whole process, the vetting of couldon, the warnings that were given, each and every single one were dealt with by the investigation that the right honorable gentlemen supported but he cannot bare the fact that an independent judge led inquiry came to that conclusion. he's the first leader of the opposition not able to ask for an independent judicial inquiry because he's already had one.

mr. richard gram. >> thank you. although the world cup football rights may have not been what we wanted. we have rugby to look forward t to:c to:would you agree that this is a great opportunity to use the chancellor's fund to make sure that the regeneration of our small cities is ready for the world cup 2015? >> my honorable friend is right that after the disappointment of the football and also the disappointment of that stunning match where we last on the second to last ball, i think it is time perhaps to look to rugby to provide us something to lift our spirits. last but not like caroline lucas. thank you very much. in my constituents fully 1/3 of

homes is 1200 pounds a month. will the prime minister back any call for a commission to figure out ways to lower the basic cost of living. >> there is a debate on how we get more houses and competitive rents. what i say to the honorable lady that we want to see more competitive rents. twh i lack at the policy of her party it lacks like you never build houses for anyone and as a result, results go up. >> order. >> coming up on cspan 3, a hearing about sexual assaults on college campuses. the testimony from educational department officials, school administrators and students. live coverage begins at 10:00 a.m. also live coverage of the president as he visits minneapolis for a town hall meeting. it is the first in a series of meetings to talk about the cost of living and the economy.

at a hearing on the merger of at&t and direct tv. ceo's from both companies talked about the proposal that would create a $45 billion internet conglomera conglomerate. this is two hours on the antitrust law hearing. the hearing will come to order. with that objection, the chair is authorized to declare a recess of the committee at any time. i recognize myself from all of the next statement. we are here today to examine the proposed merger of at&t and direct tv. as i reminded everyone that

today's procedure will not determine whether it will b approved but this hearing discusses the potential implications of this merger and allows public representatives an opportunity to pose questions to the leaders of the respective companies and hear a variety of view points on the proposed transaction. the record by today's hearing will assist the chommittee will discuss antitrust law. the propose merger comes at a time when the tell commuecommuns industry is undergoing a relatively fast changes. the proposed merger has already been announced. the business of tell

acommunications increasingly requires investment to provide innovative products and services to consumers. merge companies may be able to achieve economies of scale and have better access -- ability to access the large muches of capital needed to build out systems. the consolidation raises issues of market power and the possibility of a firm's competitive and dominate. for the most part, the company before us today engage in very different businesses. at&t is primarily a provider of voice and internet services. direct tv is almost exclusively a video service provider. at&t recently has begun offering a video service referred to as

u-verse which is a kpetor to direct tv in certain parts of the country. in addition to its video services, direct tv owns and manages a few region sports networks in the bits perripitts denver and seattle areas. today's meeting will examine the impact of their ability to provide serve ibss following the merg merger. at&t and direct have submitted a public interest statement to the federal communication's commission arguing that this merger will allow the combined company to offer a bunned el product that would enhance consume r choice by increasing competition in the market. in addition they contend that the cost savings resulting from the merge would allow additional

resources to be deployed to expanding broad band access, particularly in rual communities. we have the chairman of both at&t and direct tv today to answer questions from the public filing. with that i look forward to the asteamed panelists of the proposed merger. i now turn to ranking member mr. johnson for his opening statement. >> thank you mr. chairman. today's hearing concerns the proposed merger of at&t, a global telecommunication's company with 11 million broad band subscribers and 262700 employees serving approximately 50 million customers.

the core question at the heart of this merger is whether creating an integrated bundle of at and t's broad band services and infrastructure with direct tv's popular video programming would serve the public interest without substantially lessening competition. according to serva conducted by consumer reports last year, they are overwhelmingly a one stop shoppers who prefer to bundle phone b, internet and broad band internet into one package. not only does bundling services save consumers money at a time of increasing cable costs, but it also avoids the problems associated with multiple installation visits, service calls and phone calls to resolve disputes. as a new infant in the video

place with only $5.6 million subscribers. there is little to suggest that at&t offers serious direct competition with direct tv's video services. instead the bulk of the evidence demon strapts that each company primarily serves different markets with different services. although the proposed merger represents a concerning friend r trend toward industry consolidation. there is example evident that this transaction would create considerable public interests benefits. at&t argues that the improved bundle and cost savings generated by the merger will fundamentally improved at&t's investment this broad band. specifically at&t plans to deploy its fiber network to 2

million homes with speepds up to one gigabyte per second and deploy it over a fixed wireless loop to 13 million home in large lip rural areas with speeds between 15 and 20 meg abits per second. for millions of homes, this internet service will be the fastest ever-improving high speed access for millions while indirectly benefitting other competitors by bringing these homes online. as a strong advocate the digital conclusion, i commend than commitment to close the digital divide by bringing us to the universal adoption of affordable high speed internet. it is clear that people of color remain competitive in the internet economy which starts with a fast and affordable internet connections.

additionally this merger would benefit the public to direct tv's employees and suppliers. given the telephone industry's infamous representation for opposing organized labor, this merger would have transformational benefit for thousands of employees in this industry giving labor a strong foot hold in the industry. i urge the federal communication's commission and the department of justice to view this merger in light of these public benefits and to strongly hold the mergers to these commitments. finally, the ultrafast fiber networks, i call on at&t to deploy this advanced service in atlanta, georgia which

encompasses much of the district that i represent. atlanta is swiftly becoming an innovation economy b driven to create tanker and improve products and design. deploying an all fiber network in atlanta would benefit any start ups as well as entrepreneurs, app developers and other innovators still emerging. as a former county commissioner who understands the power of big ideas, i stand with at&t and local government to make this happen. i thank the chair for holding this important oversight hearing and i look forward to today's testimony. with that, i will yield back. >> thank you very much. thank you very many mr. johnson. at this time, i recognize the chairman of the committee mr. g man.

>> thank you mr. chairman. the only legitimate goal is the maximization of consumer well fair. depending on the enforcement, the telecommunication's industry may experience significant change over the next year as the committee and actions examine the issues associated with a multiple telecommunication's mergers, we should be mindful that insuring the best interest of consumers is the ultimate goal. it has been demonstrated repeatedly that a free and competitive market price yields lower prices, greater innovation and increased investment and services. proposed transactions result in a a marketplace. today's hearing allows a public forum to discuss the potential competitive impact of the proposed merger between at&t and

direct tv. the leaders of both company are before us today to explain how the propose d commitment. through a fair and objective inquiry by the committee, a record will be produced that will provide an important measure of transparency and thoughtfulness to the view of this proposed merger. i look forward to hearing the witnesses regarding their views of the proposed merger between at&t and direct tv. thank you, i yield back. >> thank you. at this time i recognize the former committee, mr. conners. top of the morning mr. chairman, our colleagues and our witnesses and our visitors that are here covering this potential

transaction. now, last month in may, we had a hearing that covered time, warner and comcast. now this month we're looking at direct tv and at&t. may be even next month, depending on what happens in the intervening time, we may be looking at sprint and t-mobile. question, where does this end? i am looking at a transaction that highlights the concern that there may be too much and too

rapid a consolidation in telecommunications, especially when viewed in the light of a flur flury of deals even if they are rumored. one rational is that it may spur competition nay fact spur further consoledation in the telecommunication's industry as part of what might be viewed as a race to the bottom. the merger proposed may result in reduced competition for paid television services in many of our nation's largest markets. the sheer size of a combined

at&t/directv entity could raise content praises for small internet, video providers, potentially driving some of them may be out of business. finally, there is a naed to focus on whether behavioral rm eddies are in practice, effective. so while neither we nor the competition enforcement agencies should prejudge this deal, there are several concerns that i want the witnesses to address as well as the feelings that i've already expressed. that's the fact that we're concerned that there may be too much and too rapid consolidation in the telecommunication's

industry. while i fully appreciate the goal of antitrust laws to protect competition and not competitors per se, this ongoing wave of consolidation will, without question, result in fewer firm and may harm consumers byly. ing choices and also raising prices. afterall, it's the very threat of losing business in the face of high price or low quality products and services that drive competitive business practices. now, one rationale in favor of the merger is that it would create a stronger competitor to large cable companies. now, that may in fact spur further consolidation in the

telecommunication's industry. i don't doubt that merged entities that are under consideration could be large enough to effectively compete against large cable company but what's to stop competitors from using the same argument to justify even further consolidation? so i will be looking and listening to make sure that we're not moving in the wrong direction. i wanted to put my feelings out in front of you so that any of you could feel free to give me any consolation that you want about the concerns that i have. i will put the rest of my

statement in the record and thank the chairman. >> i thank you mr. conniers. at this time, i'd like to introduce our witnesses. we have a very esteemed and qualifi qualified panel of witnesses. let me start by introducing mr. mike white. he is president, chairman and ceo. that pretty much covers everything of direc tv. one of the world's leading providers of digital entertainment services with more than 20 million customers in the united states and 15 million in latin america. i'm not sure that we realize that there are that many customers also in latin america. mr. white joined in direct in 2010 and also serves as a chairman of the company's board of directors. in addition, he also serves on

whirlpo whirlpool's board of directors. before joining, he was the ce oh, of pepsy could international from 2003 to 2009. prior to that he served as president and ceo of fritolay euro and african and middle east division. that was part of pepsy at the time. did they spin it out at some time, they did he? they also served as the ceo of general mill international. mr. joining pepsy co. he was the senior management consultant for arthur anderson and company. mr. white holds a masters degree in international relations from john hop kins university and a bachelor's degree from boston college.

we also have mr. leeber man as a graduate of john hop kins. he is also a ford foundation fellow in st. petersburg, russia. i say on a personal nature, many of my constituents are very loyal customers of direc. our next witness is -- we're glad to have you mr. stephens and mr. randall stephenson is chairman, ceo, and president of at&t. mr. stephenson, let me say this. at&t is one of the world's largest telecommunication's companies are merely $129 billion in revenues last year. i note that over the past six years, at&t is invested more capitol into the united states economy than any other public company and more than $140

billion inspected in wireless and spectrum wireless operations combined. that's a regard to be proud of. i kmepd you for that. prior to becoming ceo he served as at&t's senior vice president and chief financial officer from 2001 to 2004. as the company's chief financial officer from 2004 to 2007, mr. stephenson was appointed to at&t's board of directors in 2005. he began his long career in telecommunications in 1982 with south western bell in oklahoma. in addition to his leadership at at&t. he is chairman of the business round table. he is also a member of the board of directors at emerson direct of directors, a member of pga

tour, he received his bs in accounting from the university of oklahoma. we welcome you. i think from that record you're obviously plugged into rural consumers, too with your background there in oklahoma. mr. john bergmire. he specializes in telecommunications, internet and intellectual property issues. he advocates for public interests and policy makers and makes sure all stakeholders occurring all ordinary citizens, artists and innovators have a say in shaping emerging digital policies. he received his b.a. in english literature from colorado state university and his j.d. from

university of colorado law school and was elected to the order of cough is it -- cof. you tell, i wasn't in the order of cof. so our final witness is mr. ross leiberman. he is the senior vice president of governmental affairs at the american cable association which represents 850 independent cable and broad band operators serving small markets it and rural areas he manages the formation and implementation of the group's initiatives on capitol hill including the fcc. prior to joining them he handled government relations for echo star communication's korgs where he oversaw their filings with the fcc for the 2004 satellite

home viewer extension and re-authorization act. he received his b.a. in political science from johns hopkins university. we welcome you. ie each of their written statements will be entered into the record in their entirety. at this time we will ask each of the witnesses to summarize his testimony in five minutes or less. so with that now, we proceed to hear from our witnesses, mr. white. you go first. we will go from my left to right. >> good morning. thank you chairman balkous, ranking member johnson and

members of the subcommittee. my name is mike white. i'm ceo of direct tv. for any business to suck he'd in the succeed in the long term it must satisfy his customers needs better than the competition day in and day out. this transaction will help direct tv and at&t do exactly that. by combining complement asset and products, we'll be able to offer new services to customers at a better value. we will help consumers watch the video when they want and on the devices of their choice and we'll be well positioned to compete well into the future. historically, direct tsh v is a remarkable american success story. we've repeated aggressively by delivering for high definition

channels, a clearer picture and better service than cable. congress has had a lot owe do with our success, making sure in the early years that we could acquire the program our subscribers demanded. in recent years, however, broad band is changing everything. if we want to continue to compete effectively in today's internet driven economy, we must adapt. we must provide an integrated bundle of services because consumers are demanding better bundles of broad band which is now the more important element of the two for many. >> we must serve their customers who want over the top video offerings. young subscribers in particular want services like youtube, netflix and hulo and we need a broad band platform if we are to need their need.

cable's two way ip fra instruct infrastructure lets you offer storing in the cloud and so on. soon we will offer cloud based features such as look back. we too, will need to do all of that if we want to keep up and continue to compete successfully. fourth, and finally we'll have to continue to effectively manage content cost increases. now rising content cost challenge all video providers. yet bundled competitors can handle it somewhat better because they earn revenue from multiple sources. historically, direct tv has attempted to remain competitive by offering what we call synthetic bundled this which the video and broad band are provided by second companies but marketed together. they make for a bad customer experience. i hear it from customers all the

time they have to talk to two sales representatives and wait for two different installers to arrive on two different appointments, pay two separate bills and make two calls whenever they have a problem. they tend to be more expensive for consumers pause each company seeks its own margin on the bundled service. this transaction will help us meet all of those challenges head on. it combines direct tv's premier video assets with at&t's wireless assets. it means better bundles and more internet in rural areas, better video, and lower content costed because the additional value we can offer programmers and it means better broad band to more locations in new rural areas and more innovation particularly combining our skpeeexpertise ino and at&t's capabilities in

wireless. if you put it all together you get a better transaction that helps us serve our customers and sustains our long term competitive ps. a transaction that oecpens up a new world for subscribers. thank you for allowing me to speak today. i look forward to your questions. >> mr. stephenson. i welcome you. thank you and ranking members of the committee. >> i'm randall stephenson ceo of at&t. this transaction is unlike most mergers because it primarily combines companies with complement products and capabilities. direct tv's premier paid tv service and at&t's broad band service. the ration ale is about meeting

consumer demand. customers are looking for bundles that combine tv and broad band service. that's something that they can get from the cable providers today. as mike said, direct tv has the premier paid tv service in the u.s. but it does not have a broad band product. to effectively compete against cable, at&t bundles products and services. even though our video service is not profitable. in fact fewer than 40,000 of our tv customers, less than 2% purchase tv on a stand alone basis. we don't actively market stand alone tv service because we don't make money on it. today .60 cents of every video dollar we earn go straights to the programmers. less than a quarter of u.s. households and we don't even cover all of our broad band

footprint with video because of economic limitations. as a result, there is no significant competitive overlap between at&t and direct tv which is what consumers are commanding which is a competitive broad band bundle. being able to offer direct tv nation wide is a game changer. it will allow us to expand and to enhance broad band service to at least 15 million locations across 48 different states. those are mostly in unserved rural areas. this is in addition to the broad band expansion plans that we have already announced and the sin earthies created by the transaction. this includes 13 million locations. 85% of which are outside our traditional wire print. we think this is big news for

rule meshamerica. we estimate that nearly 20% of these have no access to broad band services and that 27% are hostage to only one provider. to many of these at&t service will be the fastest available for some it will be their first chance for truly high speed broad band. the transaction also allows us to expand our one big abite service to $2 million additional locations.