Consumer-focused groups are already pushing back on the potential merger of DirecTV and AT&T, taking a hard line stance against more media consolidation. While AT&T has offered $48.5 billion for DirecTV, and the satellite company has accepted the generous bid, the deal is still subject to intensive review.
Before it is finalized, the merger is subject to approval by DirecTV shareholders, the FCC, the U.S. Department of Justice, several states, and a variety of Latin American countries. If all goes well, the deal will take twelve months to accomplish.
However, D.C.-public interest groups Public Knowledge and Consumers Union (the public policy and advocacy division of Consumer Reports) are already calling for a review of the merger. Public Knowledge's Senior Staff Attorney John Bergmayer issued this statement:
“The industry needs more competition, not more mergers. The burden is on AT&T and DirecTV to show otherwise. We’ll have to analyze this carefully for potential harms both to the video programming and the wireless markets.
Consumers Union Policy Counsel Delara Derakhshani cut right to the chase on the matter, saying in a statement, "You can’t justify AT&T buying DirecTV by pointing at Comcast’s grab for Time Warner, because neither one is a good deal for consumers.”
It is the responsibility of both organizations to advocate for the best possible option for customers, but in this case, they are taking an extremely hard stance against the very idea of media mergers. Over the next year, we can expect to see the Consumers Union and other advocacy groups following every bit of the merger paper trail to be sure all i's are dotted and t's are crossed.
Here's the full statement from Public Knowledge:
“The industry needs more competition, not more mergers. The burden is on AT&T and DirecTV to show otherwise. We’ll have to analyze this carefully for potential harms both to the video programming and the wireless markets. The most obvious concern is that customers in U-Verse territories would lose a video competitor, though the transaction would have nationwide effects.
Public Knowledge tends to view mergers with a skeptical eye. In this case, it will help to hear more definitive information about the companies’ plans. For example, does AT&T plan to frame this as allowing it to compete more effectively with Comcast? If so, that is yet another reason why policymakers should be skeptical of the pending Comcast/Time Warner Cable transaction. We also need to know more about whether AT&T plans to offer some kind of wireless/pay TV bundle, and what kinds of services it could offer in both U-Verse territories and nationwide. Policymakers will have to ask a lot of tough questions when looking at this deal.
This appears to be becoming at a particularly complicated time, not only because of Comcast/TWC (and persistent rumors of Sprint/T-Mobile), but in light of the FCC’s plans for the incentive auction. AT&T already has overwhelming spectrum holdings relative to most of the wireless industry. AT&T will need to explain how this merger wouldn’t harm wireless competition, and how whatever new services it plans to offer by combining with DirecTV would offset any harms to wireless and video competition.”