AT&T, DirecTV Merger heading to Streamlined Senate Hearings

By Wayne Rash  |  Posted 2014-06-14 Print this article Print

In fact, by allowing the AT&T-DirecTV merger to go through, the FCC then has a reason to allow the Comcast-Time Warner merger. Each company will compete with the other, but may be different enough not to be able to set up some sort of anti-competitive cartel.

Perhaps equally important, AT&T has pledged to support the FCC's Open Internet guidelines as they were before the federal courts overturned them early in 2014. Considering the commission's unhappiness with the current state of IP interconnection and streaming deals between NetFlix and Comcast and Verizon, in which the FCC is examining charges that cable companies are disrupting streaming programs from NetFlix, the agency may be looking for a good example.

Some have suggested that the AT&T-DirecTV deal may be a problem for cord-cutters, but looking at the company's proposals, even that may not be an issue. In its press releases by DirecTV announcing the merger, the company promised to provide stand-alone broadband service specifically for Netflix users. Promises made by the companies include an expansion of broadband services and a net neutrality commitment.

AT&T for its part has filed public interest statements with the Securities and Exchange Commission explaining why its merger with DirecTV is officially a good thing. What AT&T is saying is that customers frequently want to bundle their television and broadband, which is probably true. The company is also pointing out that the merger will lower costs in the combined company, improve diversity and provide access to bundled wireless services.

What the documents don't say, but which will be important to AT&T in the long run is that the merger will do a lot to expand AT&T's business into Latin America, where DirecTV is by far the leading satellite television provider. Considering that much of Latin America is poised for explosive growth in both its business and consumer sectors, this is a smart move on the part of the wireless giant.

Considering that this is a nearly $49 billion dollar merger, is it really as benign as it seems? For the most part, it seems that it likely will be. There aren't any markets where AT&T will be the only company around.

There's plenty of TV service competition in the areas where AT&T will be doing business, and the company isn't on its way to putting other wireless companies out of business. While Dish Networks may complain if it turns out that the newly merged DirecTV seems to become stronger in a hurry, that in itself is not likely to be much concern to the FCC or to the Justice Department.

In short, it looks like the merger will be a fait accompli as it goes through the regulatory process.



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