States Investigating AT&T-DirecTV Merger

**Editor’s Note: Please click here for a recap of the biggest communications mergers in Q2 2014.**

State attorneys general are looking into AT&T’s plans to acquire DirecTV, broadening their previous probe into the merger between Comcast and Time Warner Cable, Reuters reported.

About dozen states were already coordinating with the U.S. Justice Department to interview opponents and supporters of Comcast’s $45 billion acquisition of Time Warner Cable, the news agency said.

Jenn Meale, communications director with the Office of Florida Attorney General Pam Bondi, confirmed with Channel Partners that the office is part of a multi-state group that is reviewing the mergers. Meale declined to comment on the scope of the investigations.

The attorneys general in California and New York also are part of the multi-state review, sources told Reuters. Representatives of the two agencies did not immediately respond Thursday to requests for comment on the report.  

John Bergmayer, a senior staff attorney with Public Knowledge, an organization that is dedicated to preserving the openness of the Internet and opposes the Comcast/Time Warner Cable merger, said states and the federal government have authority to file antitrust cases.

“In general, depending on state laws and the nature of the companies, they might be able to block license transfers or use other regulatory tools,” Bergmayer said in an email to Channel Partners. “State AGs looking at a big deal like this is not unusual.  Often their work complements what the DoJ/FCC are doing.”

The Justice Department’s antitrust division is reviewing both mergers to determine how they will impact competition and consumer choice.

Last month, the New York Post reported that AT&T worked out a plan with the Justice Department on the DirecTV acquisition. AT&T and the Justice Department didn’t respond to requests for comment, and DirecTV declined comment on the report. On May 18, AT&T announced its agreement to acquire DirecTV for $95 per share, valuing the equity portion of the transaction at $48.5 billion.

A deal with the Justice Department would potentially put AT&T in a good position to get the merger cleared. Lauren Wilson, policy counsel for Free Press, an organization that opposes the merger, is not aware of any telecommunications merger in which the Justice Department and Federal Communications Commission rendered different decisions. The FCC reviews a merger to determine whether it is in the public interest, and the AT&T/DirecTV deal is in the 35th day of the agency’s unofficial 180-day review.

“Traditionally with these merger reviews, the FCC and DOJ will try to work together and coordinate … so you don’t have a situation where the agencies are split,” Wilson said in a recent phone interview. “I think it’s highly unlikely the two of them will come out on opposite ends of a merger and no it’s never happened before in telecom.”

In addition to examining the effect of AT&T’s acquisition on competition, Reuters said the attorneys general are examining programming issues and asking questions about the merger’s effects on the development of high-speed broadband.

Molly Johnson, a spokeswoman with the Indiana Attorney General’s Office, said in an email that the office will be examining the impact of both the Comcast/Time Warner Cable and AT&T/DirecTV mergers in Indiana. She didn’t comment further.

“We look forward to discussions with these state attorneys generals on the significant consumer benefits created by this merger,” AT&T spokesman Michael Balmoris told Reuters.

AT&T, however, can’t count on support from Free Press.

“We don’t think there are any conditions that could make it any better for the public,” Wilson said. “We absolutely think the merger should be blocked and we will be filing a petition to deny on the 16th.”

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