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FCC Nears Approval of AT&T-DirecTV Merger

Updated

FCC Chairman Tom Wheeler said that he is recommending approval of the AT&T merger with DirecTV with conditions, including provisions to prevent the combined company from discriminating against online video competition.

The Department of Justice also has reviewed the deal and will not challenge it.

“After an extensive investigation, we concluded that the combination of AT&T’s land-based internet and video business with DirecTV’s satellite-based video business does not pose a significant risk to competition,” Bill Baer, assistant attorney general of the Antitrust Division, said in a statement.  “Our investigation benefited from the division’s close and constructive working relationship with the FCC.  The commitments that the proposed FCC order includes, if adopted, will provide significant benefits to millions of subscribers.”

Wheeler said that the proposed FCC order “outlines a number of conditions that will directly benefit consumers by bringing more competition to the broadband marketplace.” He cited the access that 12.5 million customers will get to high-speed fiber Internet connections, with AT&T planning to expand its deployment.

“This additional build-out is about 10 times the size of AT&T’s current fiber-to-the-premise deployment, increases the entire nation’s residential fiber build by more than 40 percent, and more than triples the number of metropolitan areas AT&T has announced plans to serve,” he said.

He also said that AT&T will not be permitted to exclude affiliated video services and content from data caps on its fixed broadband connections, a practice that some critics have said violates net neutrality rules. Also, AT&T will be required to submit interconnection agreements to the commission. Netflix has complained that major ISPs are using their market power to charge them fees for connecting to their network.

Wheeler also said that an independent officer would help ensure compliance with the conditions.

AT&T’s $49 billion acquisition of DirecTV was unveiled in May, 2014, and it has undergone much less of the regulatory turbulence that greeted Comcast’s proposed purchase of Time Warner Cable. Comcast eventually dropped its bid.

The combined company will serve about 26 million TV customers.

Photo: DirecTV’s Mike White and AT&T’s Randall Stephenson at a congressional hearing on the merger.

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