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AT&T, DirecTV announce $48 billion merger
By Cecilia Kang, Sunday, May 18, 5:16 PM E-mail the writer
AT&T and DirecTV on Sunday announced an approximately $48 billion merger that would create a new telecom and television behemoth to rival cable firms — while raising fresh concerns over competition and options for consumers.
AT&T would gain DirecTV’s 20 million U.S. subscribers, a company with strong cash flows and an ability to fatten its bundle of offerings. The combined firm would be able to offer phone, high-speed Internet and paid television subscriptions to more customers — packages only cable firms such as Comcast have been able to sell.
It is the latest mega-merger to be announced this year in a dramatically shifting telecommunications industry. The titans of the industry have recently rushed to bulk up — in overall size and in diversity of service offerings — as their legacy phone and television businesses fray and consumers turn to the Internet for communications and entertainment.
The deals, which must be approved by federal regulators, have prompted new concern that consumers could be left with fewer options and even higher prices after years of creeping increases in monthly bills. Last year, U.S. cable television prices increased 5.1 percent to an average $64, triple the rate of inflation, according to a government report.
“The industry needs more competition, not more mergers,” said John Bergmayer, a senior staff attorney at Public Knowledge, a nonprofit consumer advocacy group. “We’ll have to analyze this one carefully for potential harms both to the video programming and the wireless markets.”
After a failed attempt three years ago at buying wireless provider T-Mobile, AT&T had been searching for alternative acquisitions. But its choices were limited, with regulators expressing great concern that the wireless and high-speed-Internet markets were not competitive enough.
The Dallas-based company said it would gain broad strategic benefits from buying the nation’s second-largest paid-television provider. The phone giant would have greater power with television programmers to bring down licensing costs. And as the nation’s second-largest wireless carrier, it could use its new prominence in the television industry to bring videos to its mobile customers. El Segundo, Calif.-based DirecTV has an exclusive contracts with programmers, including NFL Sunday Ticket, which allows football fans to watch their favorite teams even if they live outside the local television markets serving the teams.
Originally Posted by DaFace:
DirecTV is great during the initial period, but be sure to pay attention to what your non-promotional price will be. It can be pretty significant.
Other than that, I've had them for 5 years and have been very happy.
I have Brighthouse down here, basically Time Warner Cable. They give me such a good deal on a package that its not worth it to go to Direct TV and then buy broadband separately.
I get 65meg for $30 a month. I go to direct TV and buy broadband its going to cost me $80-$100 for 20-30meg. I want my 65meg back, $120. Plus. the rain here and thunderstorms make me leary of reception. [Reply]
Originally Posted by htismaqe:
Local government sure. Federal government wants its hands in it though and that's a no go for me.
I agree. Just like electricity, water, gas etc. Broadband is local and is essential to me. I know its not to some. But the business's in the local community also need access to broadband even if you don't use it in your home. [Reply]
Originally Posted by BigRedChief:
I agree. Just like electricity, water, gas etc. Broadband is local and is essential to me. I know its not to some. But the business's in the local community also need access to broadband even if you don't use it in your home.
We have a rural telephone cooperative here. I live like a mile from the closet town, population 599. The phone company has 1700 subs and they've pulled fiber to every house in 3 three exchanges they serve.
I have 30Mbit ethernet right into my house. My SOHO router is connected directly to the network. No modem, no service provider router, nothing.
They're funded by the customer members (and the Federal Universal Service Fund but that's a topic for another day). There's absolutely no competition in these 3 little towns yet we're years ahead of many cities on the coasts. [Reply]
Originally Posted by htismaqe:
We have a rural telephone cooperative here. I live like a mile from the closet town, population 599. The phone company has 1700 subs and they've pulled fiber to every house in 3 three exchanges they serve.
I have 30Mbit ethernet right into my house. My SOHO router is connected directly to the network. No modem, no service provider router, nothing.
They're funded by the customer members (and the Federal Universal Service Fund but that's a topic for another day). There's absolutely no competition in these 3 little towns yet we're years ahead of many cities on the coasts.
Originally Posted by dirk digler:
Actually it would eliminate TV competition where AT&T is providing their U-Verse product
Hopefully this gets rejected.
pfft, U-verse doesn't count.
The Feds are not opposed to a merger eliminating a teeny-tiny irrelevant "competitor" if there would still be a healthy market and the merger makes sense otherwise. [Reply]
"technically" Cingular and Southwestern Bell bought DirecTV. SWB acquired AT&T in 2005. After this acquisition, SBC took on AT&T's name and branding, and this is the company known as AT&T today. [Reply]
Originally Posted by teedubya:
"technically" Cingular and Southwestern Bell bought DirecTV. SWB acquired AT&T in 2005. After this acquisition, SBC took on AT&T's name and branding, and this is the company known as AT&T today.
When SWB and Cingular bought AT&T, AT&T thought is was now in control, and Fucked up all the good things SWB and Cingular had. This is why we can not have nice things. [Reply]
