"Today, the cure to boredom comes from an app," said Cuban, in his testimony before a U.S. Senate Judiciary panel hearing on Wednesday. "Snapchat is taking over Millennials as the best alternative for boredom." The Senate antitrust subcommittee is reviewing the proposed $85 billion merger between media and telecommunications giants Time Warner and AT&T.
AT&T is the second largest wireless carrier in the U.S. with 130 million subscribers and more than 20 million cable subscribers through its U-Verse and DirecTV subsidiaries. The proposed tie-up would also place Time Warner's HBO, CNN, and Warner Bros properties under its umbrella.
If it's not clear, Cuban is a fan of the internet. But he says the competitive nature of the Web is forcing traditional businesses to act. He called Facebook the dominant player in content delivery thanks to its reach with Instagram, Whatsapp, and Oculus. Cuban added that Apple and Google are the sole gatekeepers for the universe of mobile apps.
"This merger is not only one of survival and opportunity but one that is good for the consumer," said Cuban.
What's more, he added that companies like Facebook, Amazon, Microsoft, and Apple have themselves innovated through various acquisitions of other disruptive companies. These deals have mostly gone under the radar, however, because they involved private companies.There needs to be more companies, Cuban told the Senate subcommittee on antitrust competition, with the ability and the size to compete with the tech giants.
AT&T CEO Randall Stephenson said that after the merger, the company's market capitalization would be $350 billion, about half the size of others like Alphabet, Google's parent company ($537 billion), and Apple ($597 billion).
The Shark Tank host said Time Warner and AT&T are not only going to face the challenge of getting people to watch television with so many other apps and services competing for their time, but technology innovations like the proliferation of more advanced wireless capability will mean an increasing number of people will cut the broadband cord, and that will create additional challenges.
Cuban argued the merger was an important strategic acquisition for both companies to stay on the forefront of an industry that's being disrupted by outside players: "By themselves, AT&T and Time Warner will have a very difficult time controlling their own destinies, let alone trying to exert influence on a market," he said. "Together, it will still be difficult, but a combined entity at least gives them a chance to battle the dominant players in the marketplace and increase consumer choice and competition for consumer attention."