Following Sunday’s unanimous board approval of AT&T‘s $48.5 billion deal to buy satcaster DirecTV, DC-based public interest group Public Knowledge and Consumers Union, the public policy and advocacy division of Consumer Reports, called for extensive analysis of the pact which is still subject to approval by DIRECTV shareholders and to review by the FCC, U.S. Department of Justice, some U.S. states and Latin American countries. The deal is expected to be made final within 12 months.
Said Public Knowledge’s Senior Staff Attorney John Bergmayer:
“The industry needs more competition, not more mergers. The burden is on AT&T and DirecTV to show otherwise. We’ll have to analyze this carefully for potential harms both to the video programming and the wireless markets. The most obvious concern is that customers in U-Verse territories would lose a video competitor, though the transaction would have nationwide effects.
“Public Knowledge tends to view mergers with a skeptical eye. In this case, it will help to hear more definitive information about the companies’ plans. For example, does AT&T plan to frame this as allowing it to compete more effectively with Comcast? If so, that is yet another reason why policymakers should be skeptical of the pending Comcast/Time Warner Cable transaction. We also need to know more about whether AT&T plans to offer some kind of wireless/pay TV bundle, and what kinds of services it could offer in both U-Verse territories and nationwide. Policymakers will have to ask a lot of tough questions when looking at this deal.
“This appears to be becoming at a particularly complicated time, not only because of Comcast/TWC (and persistent rumors of Sprint/T-Mobile), but in light of the FCC’s plans for the incentive auction. AT&T already has overwhelming spectrum holdings relative to most of the wireless industry. AT&T will need to explain how this merger wouldn’t harm wireless competition, and how whatever new services it plans to offer by combining with DirecTV would offset any harms to wireless and video competition.”
From Consumers Union policy counsel Delara Derakhshani: “On the heels of Comcast’s bid for Time Warner Cable, AT&T is going to try to pull off a mega-merger of its own. These could be the start of a wave of mergers that should put federal regulators on high alert. AT&T’s takeover of DirecTV is just the latest attempt at consolidation in a marketplace where consumers are already saddled with lousy service and price hikes. The rush is on for some of the biggest industry players to get even bigger, with consumers left on the losing end. You can’t justify AT&T buying DirecTV by pointing at Comcast’s grab for Time Warner, because neither one is a good deal for consumers.”