Cementing AT&T Strangehold, FCC Poised to Approve DirecTV Buyout

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Cementing AT&T Strangehold, FCC Poised to Approve DirecTV Buyout

Mega merger "will send yet another signal to Wall Street that harmful mergers are a better business model than actual infrastructure investment," warns press freedom group

The sun sets over telecommunications juggernaut, AT&T. (Photo: Mike Mozart/cc/flickr)

The sun sets over telecommunications juggernaut, AT&T. (Photo: Mike Mozart/cc/flickr)

Press freedom groups are sounding the alarm after news reports revealed that the U.S. government is poised to greenlight a massive telecommunications merger between industry giants AT&T and DirecTV. 

On Tuesday, after the Wall Street Journal first broke the news, Federal Communications Commission (FCC) Chairman Tom Wheeler issued a statement (pdf) indicating his approval of AT&T's $49 billion acquisition of DirecTV. And though it is unclear when the Commission will formally vote on the merger, as CNN reports, "Wheeler's recommendation makes government approval of the deal all but certain."

Under the terms of the buyout, the third- and fifth-largest pay-TV providers in the country will now be combined. Further, as the nation's second-largest home Internet access provider, AT&T will now have "new power and incentives to thwart online video competition," media advocacy group Free Press warns.

Responding to the news, Free Press policy director Matt Wood charged that the merger will only thwart competition and hasten the consolidation of the telecommunications industry.

"This deal will send yet another signal to Wall Street that harmful mergers are a better business model than actual and substantial infrastructure investment," he said. He added that the FCC "must take steps to back up Wheeler’s mantra about competition as millions of people continue to see never-ending price hikes and reduced choices."

In the FCC statement, Wheeler asserts that the agency has issued a number of conditions for the deal "that will directly benefit consumers," including a build-out that will reportedly increase consumer access to high-speed broadband.

However, Wood dismisses these commitments are nothing but a series of "empty promises," that ultimately "won't do enough to offset this deal's many harms."

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