AT&T deal for DirecTV driven by desire to pare programming costs

For anyone wondering what's driving AT&T's deal to buy satellite broadcaster DirecTV, look no further than a new report issued by the Federal Communications Commission on cable TV rates.

The FCC report noted DirecTV is often able to negotiate lower fees for channels than its smaller rivals because of its size and national reach. By acquiring the satellite provider, AT&T gets access to 20 million more homes around the country -- and the clout to demand lower rates from cable networks and other content providers. Along with gaining more programming, AT&T also believed that it needed to get bigger to compete with Comcast, the nation's largest video and broadband company that is seeking regulatory approval to buy Time Warner Cable for $45.2 billion. One of the unintended consequences of the consolidation spree is that those left without a new partner may end up paying more for content. Programmers who get squeezed by the big broadcasters then turn around and squeeze the smaller players. Getting content — at the best price possible — is increasingly what the game is all about, media analysts said.