Video services

Wheeler Blesses AT&T-DirecTV Deal

Confirming numerous press reports, FCC Chairman Tom Wheeler has come out publicly in favor of AT&T's proposed buyout of DirecTV as long as the combined company meets several major conditions proposed for the merger.

In an unusual move late Tuesday, the Federal Communications Commission (FCC) issued a three-paragraph statement from Wheeler saying that he has circulated an order recommending approval of the deal by the full Commission. "The proposed order," he said, "outlines a number of conditions that will directly benefit consumers by bringing more competition to the broadband marketplace." (See FCC Green-Lights AT&T/DirecTV Merger.)

Spelling out these benefits of the proposed merger conditions, Wheeler said the marriage of AT&T Inc. (NYSE: T) and DirecTV Group Inc. (NYSE: DTV) will now provide 12.5 million customer locations with "access to a competitive high-speed fiber connection." He stressed that this commitment amounts to "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."

Besides these additional fiber commitments, Wheeler said, the proposed merger conditions "will build on the Open Internet Order already in effect, addressing two merger-specific issues." For one thing, to prevent discrimination against online video competition, the conditions will block the new AT&T from excluding "affiliated video services and content from data caps on its fixed broadband connections."

For another, the FCC chairman said, the conditions will require AT&T to "submit all completed interconnection agreements to the Commission, along with regular reports on network performance." The idea here, he explained, is to "bring greater transparency to interconnection practices."

Lastly, in an unprecedented move, Wheeler said the FCC "will require an independent officer to help ensure compliance with these and other proposed conditions." He argued that these "strong measures will protect consumers, expand high-speed broadband availability, and increase competition.”

Want to know more about pay-TV market trends? Check out our dedicated video services content channel here on Light Reading.

With Wheeler's proposed order circulating among the other four FCC commissioners, regulatory approval of the AT&T-DirecTV deal now seems all but assured, clearing the way for the deal's completion this summer after a 14-month-long regulatory review. Even if the Commission's two Republican members totally oppose the order, as seems unlikely, Wheeler can count on passage by his two fellow Democratic commissioners.

The other main regulatory agency involved, the US Department of Justice, has already signed off on the transaction. Its merger conditions have not yet been announced. (See AT&T-DirecTV Deal Nearing Approval .)

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

Sign In