AT&T CEO: Forget Our Merger, Netflix is the Real Problem

AT&T CEO says the company absolutely must spend $86 billion to acquire Time Warner in order to compete with Netflix. AT&T is a mammoth international juggernaut whose cooperation with NSA domestic surveillance efforts makes discerning where AT&T begins and the government starts difficult to assess. The company also wields mammoth political power over state and federal lawmakers, as the company's recent attacks on net neutrality, privacy, and overall oversight of the uncompetitive broadband sector should make pretty clear.

Consumer advocates worry that AT&T's growing domination over both the conduit to the house, and the content coming into it, will provide a company with a long history of anti-competitive and downright fraudulent behavior, ample opportunity to behave even more poorly.

But throughout the debates over net neutrality and broadband privacy, AT&T has consistently tried to argue that it's Netflix consumers and regulators should be truly worried about.

AT&T CEO Randall Stephenson trotted this idea out again this week, as he tried to argue that the company simply must spend $86 billion on its Time Warner acquisition to compete with Netflix. And the DOJ has sued to stop the deal for being harmful for consumers (or because Rupert Murdoch doesn't want the added competition), Stephenson tried to suggest that Netflix is the real bogeyman, and its own power is what regulators should be investigating.

"Reality is, the biggest distributor of content out there is totally vertically integrated," Stephenson told CNBC. "This happens to be something called Netflix. But they create original content; they aggregate original content; and they distribute original content. They have 100 million subscribers," Stephenson said on CNBC. "Look at Amazon. They're doing the exact same thing. Amazon Studios, creating, aggregating, distributing; Google, YouTube, Hulu, this thing is prolific."

The demonization of Netflix as the "real problem" has been a broadband industry MO for several years as large ISPs try to saddle streaming competitors with regulation while eliminating oversight for themselves as they try to push into the advertising business. Of course the markets and regulatory environment for both companies couldn't be more different; with users often forced to use AT&T due to the company's monopoly over the last mile in countless markets.

However AT&T, a company busted in recent years for aiding drug dealing scammers , making user bills harder to understand to aid crammers , ripping off programs for both the hearing impaired and the poor -- may not be in the best position to levy such warnings.