FCC set to approve AT&T-DirecTV merger

FCC set to approve AT&T-DirecTV merger
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Federal Communications Commission Chairman Tom Wheeler on Tuesday circulated an order for commissioners to approve the proposed $48 billion merger between AT&T and DirecTV.

The order would have to be voted on by the five-commissioner panel before the deal goes through. It is still unclear when the vote will occur. 


In a statement, Wheeler announced a series of conditions he proposed to allow the deal to happen. Under the terms, AT&T would have to submit for review all interconnection deals it strikes. It would also be prohibited from exempting its own video and other content services from data caps on its fixed Internet connections, but not mobile broadband. 

As a term of the merger, AT&T would commit to expanding its fiber buildout to hit 12.5 million customers. That would increase U.S. fiber deployment by 40 percent, according to Wheeler. 

“Importantly, we will require an independent officer to help ensure compliance with these and other proposed conditions. These strong measures will protect consumers, expand high-speed broadband availability, and increase competition," he said. 

Terms on interconnection have been a key lobbying point for Netflix and others backbone service providers. Netflix in particular has complained about having to pay large costs to Internet service providers like AT&T to transfer its video from the backbone of the Internet to the last mile where companies like AT&T pick it up and route it to customers. 

The merger, first announced last year, was in front of the FCC and the Justice Department, which also signed off on the deal. In a statement, the Justice Department said the deal would "provide significant benefits to millions of subscribers."

“After an extensive investigation, we concluded that the combination of AT&T’s land-based internet and video business with DirecTV’s satellite-based video business does not pose a significant risk to competition,” said Bill Baer, who heads the antitrust division. 

The $48 billion merger would make AT&T the largest provider of U.S. cable or satellite service and would make it one of the largest wireless carriers.

The news comes a few months after the proposed merger of Comcast and Time Warner Cable fell through amid concerns from regulators that the new business would harm online video competition.

While stakeholders have raised some similar concerns with the AT&T deal, they haven't been as loud as with the Comcast deal. In addition to interconnection and data cap conditions, public advocates had also called on the FCC to require AT&T to follow new net neutrality rules regardless of whether they were struck down in court. 

AT&T released a statement saying it was anxious to receive final approval. 

"We are pleased the Department of Justice has completed its review of our acquisition of DIRECTV. We look forward to gaining the approval of the Federal Communications Commission so we can quickly begin providing consumers with the benefits of this combination," AT&T said.