Responses to AT&T/DirecTV Merger Conditions

The Federal Communications Commission is poised to grant AT&T's $49 billion proposed acquisition of DirecTV. FCC Chairman Tom Wheeler subsequently issued a statement confirming that he would circulate for a full Commission vote an order proposing approval of the deal. Chairman Wheeler outlined a series of conditions he would impose on the merger to "build on" newly implemented network neutrality rules. One condition 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. Chairman 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.

John Bergmayer, Senior Staff Attorney at Public Knowledge: "We recognize Chairman Wheeler and the Department of Justice operate within the specific scope of their merger authority under existing statutes. We applaud any conditions that will help shed light on the opaque world of interconnection. We are gratified that the Commission appears to have addressed the merger specific issues related to AT&T's ability -- through discriminatory application of data caps and through other means -- to disadvantage rival over-the-top video competitors. Nevertheless, as reflected in our filings, we believe additional steps would be helpful to fully protect competition and consumers. While acknowledging the effort made by Chairman Wheeler to protect existing competition, encourage fiber deployment, and address affordability, no one should imagine that this has solved the underlying problem of our lack of competition. While we hope the proposed merger conditions are effective and enforced, they appear to show the limits of what certain types of merger conditions can do. 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. We look forward to working with the FCC to establish industry-wide rules that fully promote competition for all."

Free Press Policy Director Matt Wood: "AT&T and DirecTV asked the FCC to approve a wasteful merger between the nation’s third- and fifth-largest pay-TV providers. The deal will reduce the number of pay-TV competitors from four to three for nearly a quarter of the country. AT&T is also the nation's second-largest home Internet access provider, and it now has new power and incentives to thwart online video competition. The merger conditions announced thus far won't do enough to offset this deal's many harms. 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. Under Chairman Wheeler, the FCC has done many things to help consumers, but it needs to do much more to promote actual competition. Prior commissioners and chairmen long ago turned their backs on Congress’ plans to promote real competition in last-mile networks. This FCC must take steps to back up Wheeler’s mantra about competition as millions of people continue to see never-ending price hikes and reduced choices. This deal will send yet another signal to Wall Street that harmful mergers are a better business model than actual and substantial infrastructure investment. We don't see enough checks on AT&T’s power in the broadband and pay-TV markets, or enough protections for true over-the-top video competition against incumbents like this newly combined company. AT&T sold this merger the same way it's tried to sell deals in the past: with a series of commitments that are no more than what it planned to do without a merger. The fiber buildout and broadband speed commitments aren’t new at all, considering AT&T's 100-city gigabit-deployment plans announced long ago, and no matter how they’re packaged today they are not the result of this merger approval. We have seen the same games from AT&T before, with the company claiming that it needed to buy T-Mobile to upgrade its wireless services by 2018. Yet AT&T made those upgrades by 2014, four years earlier than promised -- and all without the T-Mobile takeover. It’s a shame to think that AT&T can get away with such empty promises in a merger this time around."

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.

Eight companies and other groups -- including Netflix, Dish and Cogent -- sent a letter to the commission hours before details about Chairman 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 Chairman 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.