New AT&T Would Surpass Comcast

With its surprising $67 billion pact to buy BellSouth, AT&T is angling to become North America's largest broadband provider. If the feds approved the deal tomorrow, AT&T would suddenly have more than 9.8 high-speed data subscribers, about 1.3 million more customers than current broadband leader Comcast and nearly twice as many as third-place Verizon Communications. Besides all those DSL customers, the combined phone company would have close to 1 million satellite TV subscribers. That would make it a bigger player in the video business than all but the eight or so largest cable operators in the U.S. But the merger will raise an interesting issue on the video side. BellSouth currently markets DirecTV service in its southeastern territory while AT&T sells EchoStar's Dish Network service across much of the rest of the country. Which satellite provider will the combined company choose? Given AT&T's close relationship with EchoStar, it looks like DirecTV better start looking for a new sales partner south of the Mason-Dixon line.

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