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FCC chairman reveals broad strokes of AT&T-DirecTV order; DOJ won’t challenge

Regulators took that last step towards approving AT&T’s $48.5 billion acquisition of DirecTV.

Federal Communications Commission chairman Tom Wheeler Tuesday circulated to the other four commissioners an order to approve the merger with conditions and the Department of Justice also announced that it would not oppose the merger.

“The proposed order outlines a number of conditions that will directly benefit consumers by bringing more competition to the broadband marketplace,” Wheeler said in a statement. “If the conditions are approved by my colleagues, 12.5 million customer locations will have access to a competitive high-speed fiber connection. 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.”

Wheeler also said there are conditions that address two “merger-specific” issues. To prevent online video discrimination, AT&T will not be permitted to exclude affiliated video services and content from data caps on its fixed broadband service.  In the interests of transparency, the company has also agreed to submit to the FCC all completed interconnection agreements as well as regular reports on network performance.

To monitor and ensure AT&T’s compliance with the conditions, the FCC will require an independent officer.

“These strong measures will protect consumers, expand high-speed broadband availability, and increase competition,” Wheeler said.

At the outset of the deal’s announcement, AT&T made a number of promises to regulators and according to Wheeler’s statement, it looks like he took the company up on most of them. Among the early commitments, AT&T said it expand broadband coverage to 13 million rural consumers, and offer a stand-alone broadband service. More recently, AT&T proposed a low-income broadband service.

The deal, which has been under regulatory review for more than 14 months, combines the second largest wireless company and the largest satellite TV company to create the largest pay TV company with 26 million subscribers.

“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,” said Assistant Attorney General Bill Baer of the antitrust division. “Our investigation benefitted 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.”

AT&T issued a brief statement on the news.

“We are pleased the Department of Justice has completed its review of our acquisition of DIRECTV. We look forward to gaining the approval of the Federal Communications Commission so we can quickly begin providing consumers with the benefits of this combination,” the company said.

The company scheduled its second quarter conference for Thursday at 4:30 p.m., a good sign the company is expecting the deal to be approved by that time.