AT&T-DIRECTV Merger Still Doesn't Serve the Public Interest

On Tuesday, the Wall Street Journal reported that the FCC is poised to grant AT&T's proposed acquisition of DIRECTV. FCC Chairman Tom Wheeler subsequently issued a statement confirming that he would circulate for a full Commission vote an order proposing approval of the deal.

Free Press Policy Director Matt Wood made the following statement:

"AT&T and DIRECTV asked the FCC to approve a wasteful merger between the nation's third- and fifth-largest pay-TV providers. The deal will reduce the number of pay-TV competitors from four to three for nearly a quarter of the country. AT&T is also the nation's second-largest home Internet access provider, and it now has new power and incentives to thwart online video competition.

"The merger conditions announced thus far won't do enough to offset this deal's many harms. We need to see the final order to pass final judgment, but what's been revealed at this point doesn't go nearly far enough -- and doesn't appear to address the problems from pay-TV consolidation at all.

"Under Chairman Wheeler, the FCC has done many things to help consumers, but it needs to do much more to promote actual competition. Prior commissioners and chairmen long ago turned their backs on Congress' plans to promote real competition in last-mile networks. This 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.

"This deal will send yet another signal to Wall Street that harmful mergers are a better business model than actual and substantial infrastructure investment. We don't see enough checks on AT&T's power in the broadband and pay-TV markets, or enough protections for true over-the-top video competition against incumbents like this newly combined company.

"AT&T sold this merger the same way it's tried to sell deals in the past: with a series of commitments that are no more than what it planned to do without a merger. The fiber buildout and broadband speed commitments aren't new at all, considering AT&T's 100-city gigabit-deployment plans announced long ago, and no matter how they're packaged today they are not the result of this merger approval.

"We have seen the same games from AT&T before, with the company claiming that it needed to buy T-Mobile to upgrade its wireless services by 2018. Yet AT&T made those upgrades by 2014, four years earlier than promised -- and all without the T-Mobile takeover. It's a shame to think that AT&T can get away with such empty promises in a merger this time around."