AT&T’s US$48.5bn merger with DTH operator DirecTV will be scrutinised by the Senate Judiciary Committee on 24 June.
The 18-senator panel will focus on the deal’s potential impact on consumers and competition “in the video market and beyond”,…
AT&T’s US$48.5bn merger with DTH operator DirecTV will be scrutinised by the Senate Judiciary Committee on 24 June.
The 18-senator panel will focus on the deal’s potential impact on consumers and competition “in the video market and beyond”, according to the Committee’s website.
While the senators cannot block the merger, the hearing will mark the deal’s first regulatory examination and allow advocates and opponents of the tie-up to state their case.
DirecTV has 20.3 million pay-TV subscribers in the US and AT&T has 5.7 million, meaning the deal will create a giant with 26 million video customers. However, it will still not be as large as Comcast which expects to have 30 million video subscribers if its merger with Time Warner Cable (TWC) is approved.
AT&T needs approvals from the Department of Justice (DOJ) and the Federal Communications Commission (FCC), a small number of US states, and the Latin American countries DirecTV operates in before it can close the deal.
AT&T argues that the deal has public interest benefits. It believes that the synergies created by the merger would allow AT&T to expand its broadband network to 15 million customer locations over the next four years, primarily in rural areas.
AT&T offered concessions by committing to maintain DirecTV’s nationwide pricing policy for three years and comply with the FCC’s existing net neutrality policy for three years.
The Dallas, Texas-based telco expects the deal to close in May 2015. Analysts have suggested that because there are now multiple deals in front of the authorities the regulatory process could be slowed down.
Market-leading cableco Comcast has agreed to merge with the sector’s number two player, TWC, in a US$40bn-plus deal. Meanwhile reports suggest that Softbank and Deutsche Telekom are close to agreeing a merger of their wireless operators, Sprint Corp and T-Mobile, in what would be a highly controversial union.
