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WarnerMedia CEO calls T-Mobile-Sprint merger approval ‘surprising’

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A dispute in recent days over the independence of federal courts and law enforcement has rocked Washington D.C. — after rare public unrest between President Donald Trump and Attorney General William Barr over the sentencing of Trump-ally Roger Stone.

But “surprising judicial activities” like the approval of a merger between Sprint (S) and T-Mobile (TMUS) have also disrupted the U.S. business environment, says AT&T (T) President and COO John Stankey.

“It’s getting harder and harder to predict what outcomes are,” he says. “That kind of uncertainty is tough for business.”

Stankey, who’s also CEO of WarnerMedia, noted that a judge’s approval last week of the Sprint-T-Mobile merger “adds to the list of the number of surprising judicial activities we’ve seen over the last couple of years — not only in our industry but elsewhere.”

John Stankey, AT&T President and COO, appears on "Influencers with Andy Serwer."
John Stankey, AT&T President and COO, appears on "Influencers with Andy Serwer."

T-Mobile and Sprint are the third- and fourth-largest wireless carriers in the U.S, respectively. The DOJ filed a brief in favor of the merger, after having opposed a merger last year between Time Warner and AT&T — a DOJ challenge that Stankey also called “surprising.” Last year, a federal judge nevertheless approved the merger between Time Warner and AT&T.

According to a report from the New Yorker in March, Trump pressured the DOJ to block the merger between Time Warner and AT&T, which the article says many suspected was motivated by Trump’s disapproval of media coverage by CNN, owned at the time by Time Warner. Stankey said he could not comment one way or the other about whether Trump played a role.

“I really don't know what went on behind the scenes,” he says. “I have no firsthand information or anything like that.”

The Trump administration has also drawn scrutiny over a cloud computing contract given to Microsoft by the Pentagon. Last week, a judge stopped work on the contract, letting proceed a court challenge brought by Amazon, which alleges bias against the company. Amazon says the administration inappropriately awarded the contract because Trump intervened against the company, due to a dispute with CEO Jeff Bezos, who owns the Washington Post, which has published coverage critical of the president.

The Defense Department is “confident in our award,” a Pentagon spokesperson told the New York Times.

Stankey made the remarks during a conversation that aired in an episode of Yahoo Finance’s “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.

In addition to his role in the c-suite at AT&T, Stankey is the chief executive at WarnerMedia, which controls properties like HBO, Turner, and Warner Brothers. Among his responsibilities is the oversight of HBO Max, a new streaming service set to launch in May.

Stankey said he is concerned about uncertainty caused by federal court and law enforcement activity under the Trump administration.

“I step back from that and I worry about that at the macro level more than anything else relative to what it means within the industry.”

Ultimately, a federal judge rendered the correct decision in the case of the AT&T-Time Warner merger, Stankey said.

“I'm comfortable, having watched the entire judicial process, that justice was done and the facts were put on the table,” he says.

“Fortunately, we have great institutions in this country,” he adds.

Verizon, a wireless carrier, is the parent company of Yahoo Finance.

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