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Among Big Mergers, AT&T-DirecTV ‘Easiest to Pass’ Regulatory Muster

By Craig Galbraith
June 13, 2014 - News

**Editor's Note: Please click here for a recap of the biggest channel-impacting mergers in Q1 2014.**

Will AT&T’s $48.5 billion acquisition of DirecTV actually save customers money in the long run? That’s what the telecom giant argued in an FCC filing this week.

The carrier said consumers will be able to save money on bundles that include wireless, wireline and television service that AT&T is currently unable to provide since it only offers video in a limited number of markets. The company says that will eventually force Comcast and other cable giants to lower their prices for service as well.

But that’s looking too far ahead. The bigger immediate question is if this deal can get regulatory approval.

“The FCC has its hands full these days. AT&T/DirecTV, while a big-number deal, probably is the easiest to pass," noted Rich Karpinski, principal analyst with Yankee Group, commenting specifically on a Reuters article. “Standalone satellite TV companies certainly aren't the future of anything. What AT&T gets with the deal is deeper content connections, which will help both its U-verse and potential over-the-top (OTT) content businesses become better competitors as well. In particular, if Comcast/Time Warner gets a pass, the FCC will have a hard time holding up AT&T/DirecTV. As we've noted, the best path forward for the FCC would be to use this momentous time – multiple mergers in front of it, pending rulings on Net neutrality and network peering still to come – to reshape the communications industry on the fly, and with reasonable consensus among industry players and consumer advocates. The alternative, waiting for Congress to re-regulate, is simply too long a wait. It may be risky, and a bit messy, but it’s the best chance to write (or at least right) the rules of the game moving forward."

Follow senior online managing editor @Craig_Galbraith on Twitter.

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