[opendtv] AT&T Files DirecTV Deal With FCC | Multichannel

From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
Date: Fri, 13 Jun 2014 08:27:41 -0400
http://www.multichannel.com/news/policy/att-files-directv-deal-fcc/375097

AT&T Files DirecTV Deal With FCC

AT&T Wednesday officially filed its proposed DirecTV merger with the FCC, 
including public interest statements, saying the deal was all about the bundle.

"This transaction will unite two companies with uniquely complementary assets 
to create a strong, national competitor that delivers consumers an unparalleled 
combination of broadband, video, and wireless services," AT&T told the FCC.

AT&T announced in May that it had agreed to acquire satellite operator DirecTV 
in a $48.5 billion deal creating the second-largest pay TV operator 
(http://www.multichannel.com/news/video/att-agrees-purchase-directv-495b-...).

In its public interest statements, AT&T said that the main reason for the meld 
was that they could achieve together what they could not separately: "A 
compelling bundle of video and broadband services" that neither company could 
offer individually.

At an Aspen Institute event Wednesday, AT&T D.C. exec James Cicconi said that 
one goal of the deal was to create a stronger national video competitor to 
cable, a point the public interest statement made high up. "AT&T can only 
provide video service, and thus a broadband/video bundle, to…less than 
one-quarter of U.S. TV households," the company said. "As a result of its 
relatively limited video footprint, AT&T is far smaller than Comcast and Time 
Warner Cable, its principal competitors. Lack of scale particularly hinders 
AT&T with respect to content acquisition, which is by far the largest variable 
cost of MVPD service."

AT&T pointed out that 97% of AT&T's current video customers already take at 
least a double-play of services, predominantly video and broadband.

AT&T said the deal would allow it to expand its video footprint sufficiently to 
get more and better programming. "As a result of its relatively limited video 
footprint, AT&T is far smaller than Comcast and Time Warner Cable, its 
principal competitors. Lack of scale particularly hinders AT&T with respect to 
content acquisition, which is by far the largest variable cost of MVPD service."

AT&T outlined the consumer benefits of the deal, which it summarized as being 
the stronger competitor to cable that bundling will allows. But it also talked 
about offering high speed broadband to an additional 15 million customer 
locations within four years.

That will comprise FTTP wireline broadband service to 2 million more customer 
locations fixed wireless local loop (WLL) technology to approximately 13 
million, mostly rural, customer locations. Cicconi talked about that rural 
commitment at the Aspen Institute event, signaling the filing was imminent.

The fixed wireless component will be offered in areas outside AT&T's wireline 
footprint, as well as within it to those who do not receive a U-verse broadband 
and video bundle. AT&T pointed out that will expand access to OTT video 
services like Netflix, Amazon, Google, and Hulu. Access to online video 
competition could be a selling point with the FCC.

AT&T said the deal will benefit competition by putting significant downward 
pressure on prices for bundles of AT&T/DirecTV service, not to mention the 
improved quality--though AT&T did mention it.

AT&T made the following deal commitments "to ensure the continued vibrancy of 
OTT competition, as well as video competition more generally."

1. "AT&T will adhere to the Commission’s Open Internet protections established 
in 2010 for three years after closing, regardless of whether the Commission 
re-establishes such protections for other industry participants following the 
D.C. Circuit’s vacatur of those rules. "

2. "[F]or three years after closing, AT&T will continue to offer standalone 
retail broadband Internet access service at reasonable market-based prices, 
including a service of at least 6 Mbps [high-speed] down (where feasible) at 
guaranteed prices in areas where AT&T offers wireline broadband service today.

3. "AT&T will commit to offer, for three years after closing, standalone 
DIRECTV satellite video service at nationwide package prices that do not differ 
between customers in AT&T’s wireline footprint and customers outside the 
footprint."
[opendtv] AT&T Files DirecTV Deal With FCC | Multichannel

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