AT&T, DirecTV Merger Heading to Streamlined Senate Hearings

NEWS ANALYSIS: Little regulatory opposition is expected as communications giant AT&T and satellite TV provider DirecTV seek approval of their $49 billion merger.

The planned merger between communications giant AT&T and satellite television provider DirecTV appears to be moving ahead with little opposition.

On June 12, the Chairman of the House Subcommittee on Communications, Greg Walden (R-Ore.) told The Hill newspaper in Washington that he has no plans to hold hearings on the merger. While House Judiciary Committee Chairman Bob Goodlatte (R-Va.) has said that his committee would hold hearings on the proposed merger, no hearings have been scheduled to date.

Meanwhile, the Senate Judiciary Committee has said that it would hold hearings on the proposed merger in the afternoon of June 24. Some rumors on Capitol Hill suggest that the House hearings may happen that morning, but there is no confirmation from the committee.

The action to announce hearings in the Senate came on the same day that AT&T and DirecTV formally filed their application for license transfer with the FCC and the agency issued its required public notices as to procedures for the application process. The FCC also opened Docket 14-90 in regards to the application. The opening of the docket also means that the FCC is opening its public comment period regarding the proposed merger.

Right now, there seems to be little interest in the merger among public interest groups or others that generally get involved with major communications mergers. On the face of it, the combination of the two companies does not appear to be anti-competitive, and the two companies have little overlap in their operations. It is likely, in other words, that the merger of these two companies will sail right through the approval process.

Of course, there will be a few concessions required by the FCC on the part of AT&T, which will be the surviving corporation. Sensing this, AT&T has already said it will divest itself of América Móvil, a wireless company in Mexico. The merged organization will likely be required to maintain its quasi-bundling relationship with Verizon and Comcast. (Both can resell DirecTV as part of a bundle.)

Considering it's such a big merger, bigger than Time Warner and Comcast in terms of dollars, why so little action? It's probably because there's really not much about it that's anti-competitive. Unlike AT&T's failed merger with T-Mobile, the two companies don't have competing wireless networks. While AT&T does provide cable and landline service in the United States, that doesn't directly compete with anything DirecTV does.

On the other hand, given the proposed Comcast-Time Warner merger, what AT&T is planning actually makes some sense. The merger with DirecTV will give AT&T some scale and some access to media that can compete with TW.

Wayne Rash

Wayne Rash

Wayne Rash is a freelance writer and editor with a 35 year history covering technology. He’s a frequent speaker on business, technology issues and enterprise computing. He covers Washington and...