Video services

AT&T: Merger Review Halt Won't Hurt Us

Despite the FCC's pause of its review of AT&T's proposed purchase of DirecTV, AT&T officials are not panicking, at least not yet.

The FCC stopped its informal "shot clock" for reviewing the $48.5 billion deal Wednesday, along with its similar review of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s proposed $45 billion buyout of Time Warner Cable Inc. (NYSE: TWC). The Commission cited strong concerns that media companies have expressed about permitting even limited public access to their closely held programming contracts with the four pay-TV providers.

Speaking on his company's third-quarter earnings call with analysts late yesterday, AT&T Inc. (NYSE: T) CFO John Stephens said AT&T remains confident that the Commission will approve its purchase of DirecTV Group Inc. (NYSE: DTV) sometime before next July, enabling them to close the deal shortly thereafter. "It doesn't change our view that we'll be able to get the deal approved and closed in the first half of 2015," he said in response to an analyst question. "We're still optimistic about the transaction."

Stephens emphasized that the FCC's move came in reaction to content providers' concerns about the confidential nature of their programming deals with the pay-TV providers, not anything concerning the details of the merger itself. The stop-clock halt "has nothing to do with the benefits or merits of the deal or any information that we provided," he said.

Want to know more about the big pay-TV meger deals? Check out our dedicated video services content channel here on Light Reading.

In addition, Stephens stressed that AT&T, unlike its content partners, has no problem sharing the programming-contract information with the Commission. "We're ready to provide what they requested from us today," he said. "We're confident in the FCC's rigorous procedures for keeping the information confidential."

Comcast executives expressed similar sentiments in an official statement late yesterday and in comments on their third-quarter earnings call Thursday morning. "We continue to believe the review will get completed as we said and will get closed in early 2015," said Comcast Chairman & CEO Brian Roberts, shrugging off any concerns about a delay.

On the AT&T call, Stephens also underscored that such clock stoppages are "not uncommon or rare" occurrences" in FCC merger reviews of this size. The Commission halted the review of the AT&T-DirecTV merger on Day 76 of the 170-day period, leaving 104 days to go. The Comcast-TWC merger review, which started a bit earlier, was stopped on Day 85 of the shot clock, leaving 95 days to go.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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Phil_Britt 10/31/2014 | 2:25:24 PM
Re: AFC In some ways, it's back to the future, as you mention. But this time A&T is seeking the merger to continue to compete with the 800-pound gorilla, Comcast.
mendyk 10/28/2014 | 2:08:03 PM
Re: AFC You say you don't think the issues should be "poluted" by politics, and yet you can't help but make a political reference in your comment. That's an odd way to make your point. But I'll play along for argument's sake: If we all accept the premise that "conservatives" are pretty much against most forms of taxation, and USF is funded by a federal tax on users of telecom services, wouldn't it make sense that conservatives would be predisposed to de-funding USF and eliminating a tax?
bigggtom 10/28/2014 | 1:34:37 PM
Re: AFC The FCC and telecom technology is too complex and important to be poluted by politics.  Issues regarding service in rural area where subscribers are only one or two per mile need more that Red or Blue considerations.  I'm a conservative, but sometime that group makes really dumb choices.  Liberals are dumber, with much more consistant stupidity.  
brooks7 10/28/2014 | 9:58:03 AM


I think the problem here is that we are talking about the elimination of a tax supported program.  Those are public funds.  I jumped into this because bigtom was saying that the problem was these networks are built with private funds.  But his current argument is that public funds are required to keep many of the IOCs aliave.  This is true.

And by the way, the way he talks about rural RBOC properties is correct.  They are neglected but subsidized by the larger more urban properties.  The reason the Bell Companies did not get USF (in general) is that a high percentage of their loops in any state were not high cost loops.  USF was designed for companies that had a significant part of high cost loops in their properties.

Now also to be fair, there were accounting firms that were built around just doing work to make sure that IOCs got a maximum subsidy from USF.  

His current argument is that small IOCs are the only way to serve rural America.  I wonder how Fairpoint, Frontier, Centurylink, TDS and other substantial IOCs feel.  


mendyk 10/28/2014 | 8:39:18 AM
Re: AFC In D.C.,  almost all roads lead to Harvard or Yale, whether the cars are blue or red. To my earlier point, doing away with the FCC and USF has been a conservative "cause" for years. This is a power and lobbying issue that has very little to do with political affiliation.
bigggtom 10/27/2014 | 9:54:40 PM
Re: AFC Obama appointed te last two administrators, both venture capitalists, neither with telecom industry experience.  Genekowsi was his Harvard classmate.  While he was the administrator, Genekowsi had a radical experience when visiting a telephone company in Nebraska.  For the very first time in his life he road in a car on a gravel road.

Genkowsi was shocked to learn that there were more than a few telephone companies.  He felt that it was very inefficient to pay USF funds to rural companies because their cost of delivering service was higher than in the cities.  He suggested that the big companies should just take over the little ones and work out the cost difference internally. What are the chances that such an idea will be good for Rural America?
mendyk 10/27/2014 | 11:49:28 AM
Re: AFC What's kind of funny here is that "gutting" of USF has been advocated by a whole range of political leaders across the political spectrum. Suggesting that this is an "Obama" problem is naive at best.
brooks7 10/27/2014 | 10:33:45 AM
Re: AFC biggtom,


My point was and still is that the IOCs used a whole lot of public funds.  Your claim was that it was private funds.

If the rural company can't provide effective services and the only reason they survive is being on the public dole, then why would we not want AT&T or anybody else to build a wireless service and replace them?  It is not our job to make to keep any company in existence.

I commented on AFC simply to point out that I served this market.  We had an entire team of folks to help with USF applications.


bigggtom 10/27/2014 | 7:48:49 AM
Re: AFC Arguing the merits and schedule of AFC and DSL is beside the point.  

AT&T is not overbuilding.  They will be using the spectrum they own and that of DirecTV and putting 4GLTE on towers and adding widely dispersered towers across rural America.  From those towers they can provide fixed wireless to antennas on the side of farm houses, and from a Wifi router device in the home provide voice and data services rivalling anything the small companies can offer. Then they add the DirecTV dish and they will totally put the rural company out of business.

With Obama and his FCC gutting of USF,rural companies need broadband to survive.  They will go the way of AFC when it tried to sell to the Bell Companies. gone.   
brooks7 10/26/2014 | 12:40:55 PM
Re: AFC biggtom,

Better go check your facts.

Broadband has a specific set of funds.  And we introduced DSL in 1999...in fact the same year I got DSL from AT&T at my house.


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