Late last week, the FCC approved the consumer-friendly merger between one of the nation's largest wireless carriers and the largest satellite TV provider. AT&T’s $48.5 billion procurement of DirecTV creates a combined business possessing around 26 million TV subscribers, classifying it as the largest pay TV company in the United States. The United States Department of Justice (DOJ) had previously confirmed that the deal does not pose any competitive threat to the market. AT&T didn’t completely clear its last regulatory hurdle, however; the FCC voted to approve the merger with attached conditions. These include provisions to prevent the new company from discriminating against online video competition. In addition, AT&T agreed to exponentially increase its high-speed fiber optic broadband network range and upgrade Internet connections to schools and public libraries.
This approval came just three months after the FCC and DOJ indicated that they would block attempts by Comcast to takeover Time Warner Cable.
The FCC’s ill-conceived net neutrality regulations adopted in March forbid broadband providers from granting special treatment to some forms of traffic over others. These rules affect the workings of AT&T’s deal, as the merger’s approval prevents AT&T from favoring DirecTV shows over other content in customers’ broadband data plans. By attempting to set conditions in this deal in order to further its own net neutrality policy goals, regardless of the harmful effects on valuable, marketplace competition, the FCC is abusing its power.
In the past, AT&T and DirecTV have joined forces to provide Internet and TV bundles. The recent merger will allow for the continuation of such actions, but in a more valuable way. These bundles can greatly incentivize service providers to diversify and expand into new markets.
“For our goal of universal broadband access to be realized, we need both universal deployment of networks and access to affordable services,” FCC Commissioner Mignon L. Clyburn said in a statement. “This merger makes strides in achieving both of these goals.”
National Taxpayers Union praises the decision of the FCC to finally approve a merger that greatly benefits consumers while simultaneously furthering market competition, despite attaching certain unwise conditions.