AT&T/DirecTV Deal Advances, Wheeler Extracts Conditions

July 22nd, 2015 by · 2 Comments

After more than a year of regulatory wrangling, it looks like AT&T might actually win a mega-merger round. FCC Chairman Tom Wheeler has reportedly decided to back the deal. The full commission still has to officially vote, but with Wheeler’s support that’s just a formality.

It was 14 months and 3 days ago that AT&T pulled the trigger on DirecTV for $95/share in a $67.1B deal. The end result will be US video subscribers of 26 million, surpassing those of Comcast but using satellite to do it. It also gives them 12.5M video subscribers in Latin America, and further expands the company’s position in Mexico where they have been actively buying wireless assets as well.

But to win approval, AT&T had to agree to several major conditions — three of which are definitely worth noting.

The first, and rather obvious, condition was to agree to network neutrality as implemented by the FCC this past spring. AT&T was actively opposing net neutrality in court, we will have to see what this means for those efforts.

The second is the agreement to expand AT&T’s FTTP reach to 12.5M homes, a 10-fold expansion above what they have now. Some of that AT&T was already supposedly working on, but this triples the metro areas they’ll be reaching even those plans. If you believe it, of course. Failing to fully make good on buildout promises over longer timescales than the terms of most FCC Chairs can keep watch is a core competency of all incumbent providers. New York City is still complaining about Verizon’s failure to bring FIOS to all its residents as it once promised. On the other hand, though, AT&T really needs to get its ass in gear on the fiber front anyway.

But it’s the third that interests me the most, because I’m somewhat amazed at how willing Wheeler has been to take up the interconnection and peering baton. AT&T has agreed to submit its interconnection deals with OTT competitors for review, as well as reports on actual network performance showing how it treats such traffic. The FCC’s net neutrality ruling put the agency in a position to intervene in such disputes already, of course, but it was still a theoretical thing.  Not anymore, it seems.

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Categories: Government Regulations · Mergers and Acquisitions · Video · Wireless

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2 Comments So Far

  • Odd says:

    Remember how AT&T was going suspend fiber buildouts in the wake of the FCC’s net neutrality ruling? Neither do they, apparently.

    • Rob Powell says:

      Other than Austin, those buildouts have been all hat and no cattle since they were announced anyway. We’ll just have to see if that finally changes.

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