Reaction mixed to AT&T-DirecTV merger conditions

Reaction was mixed among industry and public interest groups after AT&T’s proposed $49 billion merger with DirecTV inched closer toward approval Tuesday night. 

AT&T said it was anxious for the Federal Communications Commission (FCC) to approve the merger after FCC Chairman Tom Wheeler on Tuesday circulated an order recommending approval with some conditions. The Justice Department also signed off on the deal.  

{mosads}Public Knowledge applauded Wheeler for some of the conditions he outlined — specifically on interconnection and data caps — but said the agency’s authority to impose terms does not go far enough to protect competition in the industry. 

“We therefore call on the FCC to move expeditiously on industry proceedings that will do what merger conditions cannot — promote competition nationally and open the video marketplace to more low-cost, innovative and diverse broadband opportunities,” the group said in a statement. 

Free Press lamented the news, saying approval would signal that merging giant companies is a better way to acquire customers than “substantial infrastructure investment.”

“The merger conditions announced thus far won’t do enough to offset this deal’s many harms,” the group said. “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.”

The American Cable Association wanted conditions geared toward protecting rivals. It called on other commissioners to demand that AT&T not charge rivals higher prices for regional sports networks in some regions.  

On Tuesday, Wheeler outlined a series of conditions he would impose on the merger to “build on” newly implemented net neutrality rules. One would prevent AT&T from exempting its own video programming from data caps on fixed broadband. Another would allow the FCC to review all deals AT&T strikes on interconnection — the process of transferring traffic from the backbone of the Internet to the last mile, where providers like AT&T route the traffic to customers. 

Wheeler’s terms would also require an independent officer to make sure AT&T adheres to the conditions. AT&T has agreed to provide high-speed fiber connection access to 12.5 million customers as well.

Imposing interconnection terms was a priority for a number of groups. 

Eight companies and other groups — including Netflix, Dish and the Cogent — sent a letter to the commission hours before details about Wheeler’s decision were made public, urging the commission to bar AT&T from imposing interconnection access fees. 

Comptel, a trade group for competitive carriers, applauded Wheeler for having interconnection take “center stage” in the merger talks. 

“The transparency condition gained in this merger will give the Commission the tool it needs to review AT&T’s interconnection practices to determine whether it is living up to the industry’s standard of no access fees,” the group said.