By AT&T has announced that they and DirecTV have entered into an agreement that would see the former swallowing up the latter for an insane $48.5 billion. The deal has already been unanimously approved by shareholders and board members on both sides of the table, so all that’s left is to convince the justice department that this won’t hamper competition in the United States.
The writing has long been on the wall for DirecTV being swept off its feet by a conglomerate like AT&T, so it’s hardly surprising that the deal has finally been put onto the table. So what are both sides hoping to get out of the deal? More business, really.
For AT&T, they’d be able to deliver broadband internet access to 15 million more consumers, mainly those who live in more rural areas. AT&T will also obviously get access to DirecTV’s satellite programming business, which includes lucrative exclusive content from the NFL through their Sunday Ticket package.
For DirecTV (and, well, AT&T), they’ll be able to package TV services with a more robust selection of home and mobile phone packages, as well as internet packages that they haven’t quite had access to. They’ve already been partnering with the likes of Verizon, AT&T, MediaCom and more to offer phone and internet bundles to their consumers, but the savings for taking advantage of those bundles don’t usually amount to more than $10.
Here is the full list (as told by AT&T) of what they’re looking to achieve with this deal:
- 5 Million Customer Locations Get More High Speed Broadband Competition. AT&T will use the merger synergies to expand its plans to build and enhance high-speed broadband service to 15 million customer locations, mostly in rural areas where AT&T does not provide high-speed broadband service today, utilizing a combination of technologies including fiber to the premises and fixed wireless local loop capabilities.
- Stand-Alone Broadband. For customers who only want a broadband service and may choose to consume video through an over-the-top (OTT) service like Netflix or Hulu, the combined company will offer stand-alone wireline broadband service at speeds of at least 6 Mbps (where feasible) in areas where AT&T offers wireline IP broadband service today at guaranteed prices for three years after closing.
- Nationwide Package Pricing on DIRECTV. DIRECTV’s TV service will continue to be available on a stand-alone basis at nationwide package prices that are the same for all customers, no matter where they live, for at least three years after closing.
- Net Neutrality Commitment. Continued commitment for three years after closing to the FCC’s Open Internet protections established in 2010, irrespective of whether the FCC re-establishes such protections for other industry participants following the DC Circuit Court of Appeals vacating those rules.
- Spectrum Auction. The transaction does not alter AT&T’s plans to meaningfully participate in the FCC’s planned spectrum auctions later this year and in 2015. AT&T intends to bid at least $9 billion in connection with the 2015 incentive auction provided there is sufficient spectrum available in the auction to provide AT&T a viable path to at least a 2×10 MHz nationwide spectrum footprint.
Of course, their desire to snap up DirecTV likely stems from more than just wanting to bundle all these TV, phone and internet packages up and deliver them to more consumers. This is likely their response to Comcast and Time Warner Cable looking to tie the knot (a deal that would otherwise put AT&T at a serious disadvantage).
AT&T will no doubt leverage that rival acquisition to bolster their own argument whenever this deal hits the desks of judges and antitrust regulators. There’s no early indication on what will happen with either of these deals just yet, so both are on pretty even footing in regards to what will eventually be decided.
Between all these acquisitions and the unsettling advancement of the death of net neutrality, the state of television, phone and internet in the United States is definitely under the microscope of every industry pundit, expert and enthusiast out there. The next year and change has the potential to define telecommunications in the country for the next decade or more, so this is all a very big deal, folks. AT&T will be holding a phone press conference this morning to discuss the acquisition, so keep an eye out for any more information that might stem from those proceedings.
[via AT&T]
Does anyone know if DirecTV owns any spectrum that could possibly be part of this deal?
Sounds like a good idea. Personally I would like to see Verizon buy direct TV but anything to keep comcast in check makes me happy.
Thoughts of savings to the consumer of anything more than $10 for bundling are moronic. Further savings could be offered through a deal like this. But to think that money will go anywhere other than shareholder pockets is ridiculous.
48.5 billion? As in multiple billions of dollars?.. I really couldn’t think of a better way to spend this type of money, ya know?!
1500 bucks per subscriber, about the same amount they offered for t-mobile.
I was thinking more along the lines of helping starving people and/or country!?
Why do people think huge conglomerates like this have any intention of charity at all? If you want money from them, buy some stocks and hope for dividends.
You know what?! You are absolutely right! We should probably tell all those poor people to buy stocks ya bums!
Mitt Romney says: “Just tell the poor people to buy more money!”
Medical care and revamping the healthcare system to facilitate access to proper medical care for everyone comes to mind.
That Net Neutrality…. Sends shivers down my spine…..
i’m 1500 feet away from ATT dsl and they don’t have any intentions of extending. right now i have DISH and a local mom and pop cable company giving me 15 mps.
i also have verizon 4G, att wireless is only 3G here.
i see no advantage to switching and i betcha i aint alone.
A mom and pop cable company. I’d like to get fast Internet service from a company owned by a good old man and his wife who don’t let people f$&k with them or you, haha.
people need to do their research on “net neutrality” before commenting one way or another.
https://gigaom.com/2014/04/23/look-out-internet-the-fccs-latest-net-neutrality-plan-is-hardly-neutral/
http://www.breitbart.com/InstaBlog/2014/05/15/FCC-proposes-not-entirely-neutral-Net-Neutrality-rules
http://www.creators.com/opinion/daily-editorials/net-neutrality-not-so-neutral.html
http://www.forbes.com/sites/quickerbettertech/2014/05/19/why-net-neutrality-is-a-dumb-idea/
All I know is, people should pay for what they get and get what they pay for in a free market. We’ll all end up with a better internet than if we let the government come in and regulate and pick winners and losers. Do I WANT to pay a premium for faster internet? No. But in the end, that profit incentive for the companies is what will drive innovation and increases in quality. Take that away and we’ll end up with less. It’s almost like electric windows in cars. Years ago, that was a luxury but now its standard and you’d be hard pressed to find a new car with roll up windows. Net neutrality is socialized internet. SCREW THAT.
The problem is that the psuedo-monopoly ISPs like Comcast have almost no competition, and also built out their networks with government assistance. Since the public at large helped fund the creation of their networks and has no realistic alternative to turn to, the ISPs do need to be regulated so they don’t screw everyone.
HOWEVER, I would agree that it’s not necessarily fair for, say, Netflix to use 40% of the entire internet’s bandwidth without some repercussion for everyone. It does make sense to charge more for that, but I think that should be put on the customer, rather than being a barrier to entry for startup companies who can’t compete with the deep pockets of an established competitor. If a customer uses a ton of bandwidth, they should probably be on a higher priced plan than the customer who just uses the internet for email and cat photos… As long as the prices are still kept relatively low/fair, since again, taxpayers funded the creation of these networks in the first place.
Socialism is not evil. What people have done in it’s name has been at times. Don’t be an alarmist or paranoid about socialism simply because of fear of losing the “democratic” part of the US.
none of the -ism’s are capable of being fully implemented in their purest form. But, one constant that is proven over and over again is that less government makes people more free, more prosperous, and more innovative. The United States has changed the world and done more for man kind in its short history than any other system. We have been in steady decline which correlates perfectly with the increase in federal government control. Education and manufacturing are leading examples. Everything it touches, it screws up. You cannot manage economies this complex. Everything is interconnected, gov. intervention has unintended consequences and effects in other completely unrelated areas.
I never said it was possible to implement anything in it’s purest form. Power corrupts and absolute power corrupts absolutely, after all (most of the time). That being said the US is unfortunately the big brother who protects you from malicious countries while also strong-arming you into doing what he wants you to do whenever he feels like it. The world doesn’t need a big brother bully. It needs people to stop waging wars over claims to resources many countries each claim are theirs and theirs alone. True cooperation is in the best interest of the human species (and coincidentally all countries, races, religions and cultures). Secularism, pride and nationalism will lead to this world’s destruction if we don’t change.
Since AT&T only offers TV in 22 states currently, this could actually be GOOD. MORE COMPETITION with the financial muscle to actually back it up!
http://giphy.com/gifs/12XMGIWtrHBl5e
^ Not Android news.
I feel sorry for directtv users now they will be over price.