tv ATT CEO Stephenson at DC Economic Club CSPAN March 21, 2019 3:15am-4:09am EDT
and they are so leveraged they cannot afford any hemorrhaging. announcer: and watch sunday night at 9:00 p.m. eastern on book tv on c-span2. now a conversation with the at&t ceo randall stephenson. topics included the future of five g technology, ships in the cable industry, and the federal government's recent attempts to block at&t's merger with time warner. mr. stephenson has been head of the company since 2007 and is interviewed by david rubenstein from the economic club of washington, d.c. [applause] david: the services that you want. [laughter]
so we're very pleased to have randall stephenson, who, since 2007, has been chairman and president and ceo of the board of at&t and a company he has been at for virtually his entire career. graduated from and are a native of oklahoma. when you were growing up in oklahoma, did you say, i want to be the ceo of at&t one day? was that your ambition? mr. stephenson: i probably did not set out that goal at 17. -- until i was about 17. it just kind of worked out. david: you grew up in oklahoma, and there was a cattle business. were you ever interested in that business? mr. stephenson: lou higgins and i started out as animal husbandry majors. david: and switched to something else? mr. stephenson: obviously. [laughter] did you know what an animal husbandry major is?
david: i do. i realized that private equity work better. so, ultimately, you got a job with southwestern bell, and southwestern bell resulted in the breakup of at&t in 1984, so how did you get a job there? you were out of college. how did you get your job? mr. stephenson: i like to say i got it the old-fashioned way. my brother got me the job. my wife said i can get you a job. i went to southwestern bell, and i started out -- my first job, david, was to hang 19-inch magnetic tapes onto tape drives. you would look at a screen and hang this tape on that drive, and i would go find that tape, get the drive, push load and start, and i would do that for a 12-hour shift. that was pretty much the foundation of everything that i do now. david: your brother is still working at the company?
mr. stephenson: yes. he is a technician in norman, oklahoma. david: does he mention that you are the ceo of a company? to stephenson: he tries protect that. he is a member of a labor union. i do not think that would be received very well. david: i know a lot of people named randall who call themselves randy. how come you do not use that name? mr. stephenson: grandmother until she died last year still called me randy, and george w. bush still does. david: but you never use the name randy? mr. stephenson: not since i got older. my wife, we had our first daughter and she thought it would be cute to name our daughter randy. david: i guess she liked the name. mr. stephenson: i guess, i guess. after a year, the confusion was too much, so i went to randall, but it just sounds more grown-up, too. david: i think so. you're working your way up. so here is the question to be
very serious. when 1984 came, at&t was broken up. they had seven baby bells and there was at&t. people may not remember, but at&t was the long distance provider. the baby bells more or less did the fixed line telephones. the smallest of the baby bells was southwestern bell headquartered in st. louis. mr. stephenson: correct. david: how did the smallest become the one that ate up everybody else, and now there are really only two of you left, verizon and you, and you are a content provider, and what enabled southwestern bell to buy everybody else when nobody thought the smallest one would be that strong? mr. stephenson: leadership. i believe more than anything is what drove it. one thing, when at&t broke up, and those seven baby bells all went out there, and they got the local service, and at&t had the long distance service, and back then, everybody thought that was where it was going, and it turns
out to be that is what got commoditized, but something that is not discussed much is that at&t owned a lot of wireless airwaves. keep in mind in 1984 that wireless service did not exist, so those wireless airwaves got pushed out to the baby bells last-minute. who is going to get these wireless airwaves out? we ended up with the baby bells, and we built out the wireless technology aggressively, and in the late 1980's, the guy who was running at&t at the time, my predecessor said this is where the growth is going, but you need to have a national footprint, so he went out and started making acquisitions. our stock price got killed because of what he was paying for these other wireless assets that were out there, and before long, we had a nice wireless business that was catapulting us to growth.
and then ed also said that if a national footprint is important for wireless, it's probably going to be important for everything. there were law changes that allowed us to start acquiring pacific bell, bellsouth, and ultimately at&t. so he drove a a rather -- it was a huge m&a activity that i got to be a part of. i was therefore a lot of that. for a lot of that. i am getting a robo call right now. david: is that a robo call from president trump? or somebody? [laughter] mr. stephenson: he doesn't call me. david: he does not call you. ok. so while you were working at then southwestern bell, later sbc, you went to mexico. what are you doing in mexico? mr. stephenson: we invested alongside carlos slim, the telecommunications company in
mexico. it was being privatized. so we invested along with him and i went down to be the cfo. it was like one of the greatest experiences of my life. david: did you speak spanish before you got there? mr. stephenson: no, but i started learning really quick. literally, i got down there, and after six months, i was frustrated, and i came in to my office one day and said in spanish, the next person who speaks to me in english is fired. i do not care if the building is on fire, there is an earthquake, no english. so within three or four months, it takes off. now, you make some mistakes in the interim. david: do you speak spanish still? mr. stephenson: [speaking spanish] david: ok. that is more than i speak. ok. [laughter] what i do not is understand. very often in the business world, somebody buys something, and the dominant partner that buys the other, the non-dominant partner's name survives, so sbc buys at&t. if at&t was so good, it would
have been buying sbc. so why did you not use the sbc name, since you were better and stronger than at&t? mr. stephenson: the first thing i would like to correct is when you talk about naming and language, don't use the name dominant, in this town particular, because we are not dominant, but, look. we were sbc and we were largely a regional company, five states, literally arkansas, kansas, texas, oklahoma, and missouri. so the opportunity to buy at&t, global brand, and when we were acquiring them we asked ourselves the question, what brand should we assume? they were in radical decline when we bought them, and there was about a three-minute bait about taking on a global brand that was well known and you position yourself very differently. david: you were starting out at southwestern bell, then sbc, and then you bought at&t. you took their name, at&t. you are a dominant telecommunications company? mr. stephenson: we are a large telecommunications company. david: not dominant.
[laughter] david: why are you in the entertainment content providing business now? you spent $85 billion recently to buy time warner and it took two years plus to get it approved by the u.s. government. i will ask you about that, but what was the theory behind why you wanted to be in the content business and buy time warner? mr. stephenson: it was multifaceted. i will try to simplify it. as we watch our customers and analyze our customers, as we have developed network delivery technology, where they can consume video on all devices, anywhere, everywhere they are, it has been surprising and quite enjoyable to watch how people are now consuming video, and this is just in a world of 4g. now as we move these networks, and we are moving there aggressively, to 5g, the amount of video you will be able to consume in multiple formats wherever you are -- we think is going to explode. now back in 2016, when jeff and
i did this deal, recall what people were saying. its had had its -- had had first year-over-year decline in services, and some said they were overvalued, and they were actually being traded down. i believe, my board and i believed, that is you are either you will have this many distribution points for premium video. all the distribution available any time, should the value of media go up or down, and we believed it would go up. we thought this was an acquisition we ought to do. that was premised number one. we thought we could get to -- some media businesses at reasonable valuations that would be good on both sides. but then as we began to analyze it, we said, look. is it necessarily good for at&t to own a media company? yeah, i think it is, but the relevant question is is a media company being attached to a
communications company like us worth more? what i mean by that is think of time warner. warner, turner, cnn. they told me if they stand up and leave, that means the mueller report is out. [laughter] mr. stephenson: but if you take a business like this and equip that content to be delivered directly to the consumer, then what better way to do that than to be paired with a company that has 170 million customers out there that we can distribute it to? david: ok. so you announce this acquisition, $85 billion. $85 billion. so for $85 billion, the u.s. government said, we do not like this acquisition even though it was a vertical merger. you were not really buying a competitor, but the u.s. government went to court to stop
you. do you think there was any political influence behind the decision to stop that or to try to stop that merger? mr. stephenson: hm. um. the deal had not been formally announced yet. and candidate trump came out and said, at&t is acquiring time warner, and thus, cnn. and that is a transaction the administration will never approve. and whether you are a supporter or detractor of donald trump, one thing everybody in this room must admit is when this man makes a statement on the campaign trail, he pursues it. and so, we were concerned when that statement came out. now, right on the heels of that statement, a gentleman named makin, who was a professor at pepperdine university, was asked by a reporter, what do you think of this transaction?
and this law professor of pepperdine said, i don't see any issues with it. i'm paraphrasing. but he essentially said, i do thatee any issues with about a year later, that law . professor has been confirmed as the head of the anti-trust division in the department of justice, and after, a lawsuit was filed for the first time since the 1970's that a lawsuit had been pursued against a vertical merger like this, so i have said publicly that it is the elephant in the room when asked the question, is a political motivation behind it? i have no proof that there was, but you know, one of two things. it is either a radical coincidence, or other motivations. i don't know. we took it to court and fought it on purely antitrust grounds, we did not fight it on political grounds. it was purely an antitrust question. and the court, the district court in d.c., ruled rather strongly that this was not a violation of anti-trust law and it was appealed. interestingly enough, it was a
very strong order from the district court that this was not a violation of anti-trust rules. we thought it was over. it actually gets appealed to the circuit court, and the circuit court likewise rules that this transaction is not anticompetitive, so we close the transaction, so i will leave it to others to judge. david: house democrats are saying they are going to have a hearing on whether or not there was political influence. will you be testifying if requested to do so? mr. stephenson: no one has asked me, and i hope not. [laughter] thed: ok, so when you had two years that you had to wait before you could consummate the transaction, 858 days you had to wait, the value of time warner, did it go up, or did it go down? and if it went up, you did not want to pay more for it. were you happy when you waited years and had to pay a price that was maybe cheaper than it would have been? mr. stephenson: no, i'm not happy at all that it took two years. during the court proceeding, i was questioned about this.
i made the point that since we announced this transaction, at that point in time when i was on the witness stand, that in the time since we announced that transaction to that date, the value of the thing increased by $1 trillion. that is what is really important for people to keep in mind. this thing is moving fast. we had an antitrust division that was challenging whether we would exercise undue leverage in negotiating a deal with a cable distributor. when all we were focused on was amazon, netflix, apple, these folks were moving fast. the world of video consumption is moving to streaming products while we were here debating what is happening in the world of cable tv. david: you spent $85 billion. now that $85 billion was an expensive acquisition. mr. stephenson: it was a large acquisition. it was not expensive, i don't think.
david: you think you got a good deal? mr. stephenson: yeah. david: ok. the people that were the senior people running time warner have all left. jeff is gone. the head of hbo was gone, the head of turner broadcasting is gone, and now for a lot of legal reasons and other things, the head of warner bros. studios is gone. all of these senior people are gone. does that worry you? you spent $85 billion, and they are gone. mr. stephenson: of course you worry. other than the most recent, the head of warner bros. studios, which, recently, we parted ways. the rest of them are not surprises. and for example, richard, he did an amazing job growing hbo to where it is today. but where the world is going is a different place and a world where you are going to be going directly to consumer, and not focused on distributing content through cable companies.
and so, putting hbo with turner networks so that you can begin to create a truly different and unique product is a different playbook than what has run. so when richard said it was time for him to go, we hired bob greenblatt, who is one of the best executives around in terms of developing content, a great creative mind, the guy who took nbc from where it was when he came in to the top performing tv network. and so, bringing bob greenblatt run this integration of hbo and warner is important. we have an opening at hbo studios. there is an interim structure in place. but keep in mind that the people in place at hbo or warner bros. studios, peter and others, these are serious people, and they had been running the theatrical and tv production side for years. they are the best. david: all the executives that
-- as you look to touch looked -- looked to replace some people -- mr. stephenson: i forgot to mention -- i am sorry to interrupt you, but the guy who ran cnn,
jeff zucker, he is now running all of live entertainment, but news and sports, so things he has run before, so the sports portfolio jeff zucker. david: any women are minorities -- or minorities in senior positions? is that something that you care about, diversity? mr. stephenson: yeah, we care deeply about it. i would not cast dispersions at time warner. i think this is an industry that is under indexed in terms of diversity at the most senior levels, so you can assume that is something we are focused on as we move forward. david: so where do you get your news? do you watch cnn all the time? mr. stephenson: i watch it a lot more than i used to. [laughter] mr. stephenson: with a critical eye. david: if you don't like what they say, do you call someone up and say this is not the right thing to put on? or you don't do that? mr. stephenson: no, i don't get involved in editorial content of the news.
if i don't like the color palette, i don't know, but i don't intervene and jeff zucker's business, but i am a news
junkie, and i consume news constantly. i am probably a little obsessive about it. but i have multiple sources. david: do you watch fox as well? mr. stephenson: look -- [laughter] mr. stephenson: look, i walk into verizon stores -- because i want to see -- david: do they recognize you? mr. stephenson: if they have, they have not said anything. i walk into t-mobile stores. i like being in washington, d.c., because of comcast cable. i always want to see what the competitor is doing. do i turn fox news on occasionally? yes, i do. david: let's talk cellular. today, there are four cellular companies in the u.s.? mr. stephenson: four national ones. david: you are the largest?
mr. stephenson: well, we are second, behind verizon. david: and then there is t-mobile and sprint? mr. stephenson: correct. david: you tried to buy t-mobile at one point, but were told no? -- the government of the united states said no? mr. stephenson: why would you bring that up? [laughter] david: because i wanted to ask you, now sprint is trying to buy t-mobile. if you could not buy it, why should they be able to buy it? are you opposed to them buying it? mr. stephenson: i have to be cautious, because if i say i think that deal needs to get done, that could be a deathknell, but look. when we tried to buy t-mobile, we made an argument, and i thought it was a compelling argument. i believe it was an argument that would have won in court, but we could not get into the courts. it would be rather disingenuous for me to sit here and say i thought we should have been able to buy it, but t-mobile should
not be able to combine with sprint. the same arguments apply. david: in washington, being david: disingenuous is beingid: in washington, disingenuous is not a big problem. [laughter] but ok. mr. stephenson: here's the problem, the doj filed a very aggressive lawsuit against us to block that transaction and the core premise of their lawsuit was that going from four national competitors to three is anti-competitive by definition. so they've made this extensive lengthy argument about why us doing it didn't work. it was not because two was buying three. it was because four was going to three, and i thought this would be the hurdle those guys had to get over to get this done so they had a difficult hurdle to get over. david: let's talk about the business of cellular. you're now rapidly trying to build out 5g. mr. stephenson: correct. david: explain to people who may not know. what is two g, 3g, 4g, 5g? mr. stephenson: the g means
generation so 2g is second-generation technology. when you had your flip phone, remember how you used to text using a 10-key phone? that was 2g. they allowed that kind of service. 3g is when the internet became mobile. third-generation networks allowed mobile use of the internet. it was 3g when the iphone came out that allowed the iphone. the first iphone was on two g but when it went 3g is when it exploded because you are literally using the internet on a mobile device. fourth generation is what really enabled all of us to consume cnn video on a smartphone. it literally mobilized video. without 4g technology, instagram would not be what it is today. it is all video. facebook is virtually all video now. consuming all of this video on a mobile device is facilitated by 4g. 5g i believe will prove to be the most transformative of all the g's we have seen to date. david: what will it do for us? mr. stephenson: first of all, step change faster.
it will also have zero latency, meaning you issue a command and it's immediate. you're always connected, a real-time network like turning on a light switch. it is real time. why is that important? it is really important when you start to conceive of services like autonomous cars. you don't want to be in an istonomous car that h dependent on the network with latency. you don't want to be dependent on an autonomous car that's dependent on the network with latency. it is important when you conceive of these services. you can begin to conceive of robotic manufacturing that is always on, always connected with 5g networks, and to put this into perspective, the internet of things, devices and sensors that are connected all over the place, today's networks in a square mile, you can connect 1000, 2000, 3000 of those. in a 5g world, you can connect millions of those in a square-mile.
and each of those devices that is connected to the network, you can now locate on a 5g network, rather than today, you can locate within a certain number of meters. we will be able to isolate that device within centimeters. think about what you can do as you begin to get that kind of precision on location and that kind of speed. i could not conceive of the iphone when we build a 3g network. you and i can't conceive of all the services that are going to materialize with this kind of capability. david: when the iphone was being developed, did steve jobs try to explain it to you? what did you think, and what was he saying? mr. stephenson: yeah, we were building a mobile internet, that is what 3g was about. as i said, i didn't really know what the mobile internet looked like. just build it and the people will use it. that's always been my philosophy. if you make something mobile, utility explodes. the guy in the black turtleneck
shows up with a description, an explanation of a product -- he did not have a product. he had an explanation. think about a phone that doesn't have a keypad. it's just a screen. and it has icons and you push these icons and stock quotes, the weather, you get that. the minute we saw that, that's the mobile internet. that's something we have to be a part of. that's what we are building the future for. david: so you said to steve, let's be partners? or how did you do that? mr. stephenson: let's pursue it. it was a very intense negotiation of business terms. steve, obviously, had a lot of confidence. and to do a deal -- we did the first exclusive deal with the iphone. we launched the first one, and it allowed us to fundamentally -- required us to fundamentally change our business model. it cost us a lot of money, and we took a lot of dilution when
we did this deal. we said we believe so strongly not only in the vision but in that guy, steve jobs. we said let's make this bet. david: how do you build out 5g? are you putting sensors around the country? what are you doing? mr. stephenson: so as you think about current technology, you see on the sides of buildings, these big antennas around washington, d.c. you see the towers and massive broadcasting of data and so forth. 5g is very different. you will start to see what we call small cells. we have 60 some odd thousand cell sites in the u.s. we will deploy hundreds of thousands of these small cells. david: who is we? at&t directly or do you hire a contractor? mr. stephenson: it will be all of the above. this will be a massive logistical effort. i am excited about it. stuff we do, we do well, but literally we will deploy hundreds of thousands of these antennas on light poles, the
sides of buildings and so forth. david: will it be easy for people to break that or interfere with it? because it might be reachable by average people that can climb into a place where it is, or that is not going to happen? mr. stephenson: if you can get on the roof of any of the buildings in washington, d.c., you can probably do the same thing. so it is infrastructure. it is against the law. david: right now, with the current situation, i'm driving from dulles to downtown washington, sometimes the cell coverage breaks down. mr. stephenson: it used to. it was exit 13. it does not anymore. [laughter] david: did it ever happen to you? mr. stephenson: it happened to me a lot and i would call every time i went through their. i said, i dropped the damn call again. the problem is, these guys have to get a cell site permit. getting that done in this day and age -- this is an important point. it can take 2-3 years to get a cell site permit.
we hear a lot of people, including the folks in the administration, talking about china is going to beat us to the world of 5g. in china, they don't spend two years getting a permit. they say we want a cell site and they go build it. here, this 2-3 years will be a problem. the longest pole in the tent on 5g will be deploying hundreds of thousands of small cells. david: is china ahead of us in 5g now, do you think? mr. stephenson: not now. today we have 5g, live 5g standards-based up and running in 12 markets in the united states. china right now has zero. they are running trials. now, china will commit to this. they have said this is a major focus of theirs from an economic development standpoint and a security standpoint. so they will come hard. they are investing heavily in this. david: will you buy the equipment of huawei to build out your 5g? are you allowed to? mr. stephenson: our government
has told us not to, so i get it. we are not using huawei, the chinese developer of this technology, the largest worldent producer in the for telecom equipment. our government is being very aggressive on this, that this is a security risk. i do not think that we, our government, is doing the best work in explaining why the security risk exists. and to me, the biggest risk is not that the chinese government might listen in on our phone conversations or mine our data somehow if we use their equipment. that's not the issue. conceive for a moment about what i said that we can now put millions of connected devices in a square mile. this will be the basis for autonomous cars. 5-10 years from now, every manufacturing floor will be attached to 5g. 5g will be driving robotics. 5g will be driving the manufacturing floor. 5g will be involved in traffic management around our cities.
think about what happened with just waze. that is just the networks we use today. which actually effectively does traffic management. when you have millions of these in a square mile that is isolated in a centimeter, we will be using this in utilities, in refineries. we have to ask ourselves a question. if that much of our infrastructure will be attached to this kind of technology, do we want to be cautious about who is the underlying company behind that technology? we damn well better be. now are there things that we can do to protect ourselves? that is a debate worth having. but i think our government is asking the right questions.
david: other governments around the world do not seem to be accepting that argument. are you surprised that they're not accepting this argument? mr. stephenson: this is the most confused issue that is getting front page reporting in the "new york times" and cnn talks about it all the time. the europeans are saying we need a diverse supply chain. and we all want a diverse supply chain. the problem is with huawei, they're not allowing it to be a diverse supply chain. uawei asave deployed h your 4g network, they are not allowing interoperatability. meaning if you're 4g you're stuck with huawei with 5g that's their problem. they don't have an option to go to somebody else. david: i see. let's talk about the cost if we get 5g, am i going to have
cheaper bills? mr. stephenson: i hope not. i really hope not. [laughter] david: it's not going to be cheaper. mr. stephenson: it's a more efficient technology. but the 5g experience with you and your smartphone, it's just going to be a better experience. this morn morning, we have 5g evolution here in washington, d.c. i did a speed test. i got 134 meg on our wireless network right now, ok? that's going to 400 and 500 meg. your experience will get better and better. it's more efficient. david: will people pay more for different speed tiers? but i don't think we worked out -- mr. stephenson: but i don't think we worked out the pricing arithmetic. bills, some people say, are difficult to read and understand. i don't know if you look at your phone bills, but do you ever look at them and say i don't understand what this charge is for?
mr. stephenson: i look at my phone bill every month. david: do you complain to them? who do you complain to? [laughter] mr. stephenson: phone bills can be confusing. we tax phone service like we tax cigarettes and alcohol. it's at a comparable level. you have taxes, fees, all this stuff that are required to tack on to the phone bill. i agree with you. it does make a confusing environment. david: you send phone bills every month. what percentage of people pay online and write checks out? stephenson: i think we are over 50% paying online. david: and the people over 50 are the people paying online or sending checks? what type of phone do you use? mr. stephenson: i'm carrying an apple iphone. i carry a samsung device. david: so you carry both just because which is better? mr. stephenson: i always want to compare, right?
david: right now, the business that you started out with, you being southwestern bell which was the local line business, and it was the wired line, what percentage of your revenue today -- your revenue today is a little under $200 billion -- mr. stephenson: it will be $190 billion roughly. david: $190 billion. what percentage of that revenue comes with the traditional business you started out with in 1994? phenson: if you think about that business, i started out in 1994, there was five states. there was no such thing as wireless service or broadband or tv. it was pretty much what we call plain old tell phone service. the land line telephone. and to businesses, we did a lot of data kind of stuff. that business when i started back in 1984 was about a $12 billion at the vesture. it would be irrelevant today because that plain old telephone service, it's largely gone. david: in the area, you still provide local phone service in your core area? : we do.henson but we provide it over a
broadband line now. david: what percentage of people say i want to have a telephone line put in my apartment or house when they move? they just use wireless? they don't have a wired system put in? you know you've hit a tipping point when my mom asks me why do i have this land line telephone, honey? and i said because you're ma bell and you have to have a telephone -- [laughter] personally, very few people call asking for a telephone line. david: they don't do that anymore. another acquisition they made was directv. you spent $49 billion for that. that's what some people would say is a melting ice cube business because subscribers are going down in that satellite tv business. why did you spend that much money? did you realize it was going o be going down in terms of subscriber usage? mr. stephenson: oh, yeah. when we had the deal approved by
the board, we put a business case in front of them and showed this was a business that was in decline. so we first started out with, yeah, but you put it with our business it's going to generate a huge amount of cost savings. the numbers were significant. it was like $2.5 billion a year of cost savings on top of our business you could take out of it. so you put this business with ours, and it generates well over $4 billion in cash flow. it allowed us to turn around and reinvest in a whole new tv aatform, over-the-top, streaming platform which we have done and it's a platform that's doing quite well. we also took that money, that $4 billion, and we've been investing aggressively since that time in deploying fiber. it's been the largest fiber deployment in the u.s. for the last four years. our broadband business is growing 6%, 7% by virtue of that investment. we invested heavily in an advertising platform. this is interesting to conceive because this is important. the advertising platform is core to making the time warner
acquisition play out. and that is we have a lot of information that we ask our customers permission to use. what are they watching? what are their viewing habits and so forth at an aggregated level? and we take that information and we sell advertising placement to advertisers. think for a moment about as you said the shrinking ice cube, we have an advertising information that is a shrinking ice cube. we have this advertising business that is growing dramatically. now, take that technology and combine it with cnn's advertising inventory. they have a massive advertising inventory. if we could take that technology and that data and apply it to their inventory it's a rather significant opportunity. david: disney is in the content business as well. they've been saying in the streaming business they might
not let disney products be used by other services let's say netflix. are you going to use your products only on your streaming services or can people use time warner product elsewhere? : i saw bob iger which he said something i agree with. there's not a one size fits all. there will be some content in the warner bros. inventory. the example of this that just recently happened is fourth quarter of last year, netflix licenses the -- the series of "friends." you remember "friends"? 1980's hair and all that kind of stuff. it's hugely popular on netflix. that licensing deal expired in the fourth quarter. we had a question you're asking me. do we want to use "friends" exclusively on our streaming platform or do we want to continue licensing it to netflix? and we said yes, it's important to have it on our platform, but it doesn't need to be exclusive. so we signed a deal today.
david: today who do you regard your major competitors? mr. stephenson: when i wake up in the morning i want to know -- how we did in the marketplace against verizon, comcast, charter, spectrum, etc. if you ask who do i think about in terms of where we're going in the future, look, it's amazon, it's netflix, it's disney. those are the competitive set that i spend more time thinking about. did in the marketplace against david: you now have with the time warner merger 290,000 employees? mr. stephenson: correct. david: how do you keep up with them? how do you meet with them? how do you spend time communicating your views with them? and is it awesome to have 290,000 employees you're responsible for? mr. stephenson: it's amazing. it's a big responsibility. i mean, it's one of these things you spend a lot of time thinking about is fairly compensating 290,000 employees particularly in a labor market that's 3% unemployment. it's a competitive marketplace.
we're spending a lot of time thinking about this, health care for 290,000 people is a big deal. we'll spend $5.5 billion on healthcare this year for our employees. and how do you ensure that you can continue that in the future and sustain it? we have a $70 billion pension plan. and how can you ensure these people when they're 80 years old is their pension check still coming? you spend a lot of time on these issues making sure the company is positioned and stable and fiscally secure to provide that. and recruiting is a big deal. david: investing more in private equity is what you might consider that. [laughter] mr. stephenson: i'll be happy to give you all $70 billion if you take all liability with it. david: let me think about that. [laughter] what is the best pleasure of being the c.e.o. of at&t? what are you excited about? and what's the downside other than interviews like this of
that imposition? mr. stephenson: look, when young people come in and they're trying to decide or even executives where to go to work, i just can't imagine a place where at the scale we have to deal with it, you deal with the technological innovation and technological obsolescence. on a massive scale. we will invest in the united states of america this year in all likelihood more than any other company did for the last seven years, and we'll do it again this year. so we're investing at a torrid clip. you're in an industry where the lines are blurring. you get a deal with massive issues like i just articulated and people issues. and we have the largest full-time labor union. -- labor union in the united
states. a lot of people roll their eyes. i'm glad i don't have to deal with it. it's part of the business challenge. every day it's an amazing puzzle that you get to play with and put the pieces in the right place to create value. david: you to come to washington from time to time and deal with government officials. do you have a lot of meetings with congress, the administration? do you go by president trump and say you made a mistake on that time warner? mr. stephenson: the last time i talked to him i said good job on tax reform. seriously. to your point, this is the most frustrating part of what i do day in and day out. i spend way too much time here. every minute that i'm here is a minute i'm not taking care of employees. i'm not putting together great -- a new product. i'm not hiring great executives and great people. we're not getting stuff to market. every day i spend here is a day we're not doing that. and we spend way too much time here, and too much of our success and failure is dependent on what the people of this town
decide and do on a day-to-day basis. david: i take it you never want to go into government? mr. stephenson: that would be a fair assessment. [laughter] david: speaking of the job, you've had the job for quite a while. you became the c.e.o. in 2007. now we're 2019. you've had the job for more or less 12 years, almost. you don't have a retirement age mandatory in your company, i don't think. you're 58. mr. stephenson: my wife has a mandatory retirement age, yes. david: you expect to do this for how much longer would you say? mr. stephenson: i don't know. my board and i talk about that. there's obviously a lot that goes into that decision. do you have somebody ready? do you have a bench ready and so forth? i've not given any external indication on that. david: so what is the secret to having at the age of 58 no gray hair? i notice the contrast of my situation. you have no gray hair. is that genetic or what is in that? mr. stephenson: it is genetic.
i'm told that my great, great grandmother was native american. i'm afraid to do a genetic test after what happened recently. [laughter] but my grandmother when she passed away at 98 years old, her hair looked like mine. i've been accused of dying it a lot. i don't dye it. david: what do you do for relaxation when you're not worried about the 290,000 employees? mr. stephenson: we spend a lot of time in wyoming. we have horses and love to trout fish. and i play a really bad game of golf. david: you sponsored the at&t at pebble beach? mr. stephenson: we do. >> you get to play with tiger woods or phil mickelson? anybody want to pick to play with? you're the amateur playing with them? mr. stephenson: unfortunately, it has -- it's kind of like getting married, there has to be
somebody willing to play with you. i can't say i want to play with tiger because they've seen me play. >> so you don't win that tournament or something? mr. stephenson: i've never made the cut in that tournament. >> you're not talking to people making sure it's different or something? you have two daughters. and you have grandchildren. five grandchildren what do they call you? >> they call me pop. >> not boss or anything like that? >> i was very strategic in selecting pop. this important for everyone to understand. be strategic in what you want your grandkids to call you. i chose pop because they can say it sooner than dad and it irritates your sons-in-law to death. [laughter] you told me that one of your >> daughters is training to be in the olympics as a marathon runner. is that something she got from you? >> i have never run a marathon in my life or will i ever. she recently qualified in the olympic trials in atlanta. i think they came up in february
and she ran an amazing time, 240 something so she qualified to go to the of the trials. she will make a run at it. >> any more acquisitions in the works you want to reveal today? things you're thinking about? [laughter] >> i have one focus right now and that is when we did the time warner deal, we took on a lot of debt to get it done. as people in the media like to say, where the most indebted company in the world. i have to remind people that yes but if you look at the ibita, the metric that determines your ability to pay debt, apple, samsung and three other companies have more than us. we can service the debt but i am focused on paying the debt down this year. we took on $40 billion of debt to do it. by the time we exit this year, we hell of paid at least $30 billion of it. >> so you have great data about
where the company is going. do you see the economy being in reasonably good shape? do you see a recession in the new dish in the near future? -- in recession in the near future? >> the consumers spending so looks good. consumer attitude seems to be good and we are coming off a year where the corporate tax reform did what it was designed to do and that is it drove investment. you saw business investment last year, i think the last, fourth quarter, it was up 7% which is great. i believe the reason for our economic malaise for the last few years has been we have been under investing in america. it's not a coincidence in my mind that you see business investment ticking up for the first time. you see unemployment driving down for the first time. and you're seeing, most importantly, as investment goes up, productivity goes up and went productivity goes up, you should see wage growth. we are actually seeing wage growth, nice wage growth. all of that looks really good to us.
the thing i worry about right now is investment has started to do this. i'm trying to triangulate how much of that is china, trade or how much is mexico trade. we have seen a little bit of a tick down in business investment. to me, that is the driver of employment and productivity in -- and wage growth. right now it feels ok to us. >> do you intend to expand outside the united states? >> yes, warner media has a rather large presence outside the u.s. about 30% of their revenue. >> maybe your telephone business moving into mexico? >> we have gone aggressively after mexico and we went down and bought a couple of companies down there that were floundering. we put them together and we have been investing and have a nationwide network in mexico now, 100 million people with his network which is growing at a rather dramatic pace. we have been the fastest grower in mexico for years.
>> you used to work with carlos slim many years ago, and now you are competing with him, is that a problem? >> it's not pleasant. is not a problem. carlos is a fierce competitor. when we have to sell our interest in his company, i'm easily turned around because i am a huge believer in mexico. the demographics. everything about mexico fits with our business. he knew i would turn around and bite back in. we have been computing very aggressively for the last four years. >> if you were to summarize what you would like the american people to know about at&t in a paragraph, what would you say most people should know about our company? >> technology, media, telecommunications. that's kind of a sector that people in the analyst community talk about. they talk about it that way because i truly believe
all of that is just melding. i believe the company that can create a premium media experience and pair that with a really significant distribution experience 5g driven is going to create experiences for customers that you and i cannot conceive of. to make this point, we carry around these devices and they are bigger than the should be because there is a lot of computing and storage in here. hen you get to 5g that fast, all that computing and storage goes away. it's back in the network. some would say they shrank but these factors go away. it is conceivable we will move into a world without screens, a world where this is your screen. you don't need any more of a formfactor than this once the computing and storage factors move into the network. guys like you can think very differently about how you deliver your content to our customers.
it becomes a delivery without screens. it's a totally different experience. i believe that at&t is right at the very center of all of this. if you ask yourself five years from now in this room, will you can be consuming more or less local band width. more? who thinks more? will you be consuming more or less premium entertainment? more. i like where we are in both of those. >> ok. i want to thank you for a very interesting conversation and congratulations. [applause] et me give you this. this is a map, the original map of the district of columbia. [captions copyright national cable satellite corp. 2019] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]
>> today a federal communications commissions chair speaks to the cable association at a summit in washington at 1:20 a.m. eastern on c-span 2 and a look at the role china has in developing 5 g technology. speakers include mike rogers who served as chair of the house intelligence committee. that's live from the heritage
foundation at 10:00 a.m. eastern also on c-span 2. >> once tv was simply three giant networks and a government upported service called pbs. then they came one a big idea and le let viewers decide on their own what was important to them. c-span bringing you unfiltered content from congress and beyond. in the age of power to the people, this was true people power. the landscape has clearly changed. no monolithic media. youtube stars are a thing but c-span's big idea is more relevant today than ever. no government money supports c-span. its nonpartisan coverage of washington is funded by your cable or