While AT&T looks forward to becoming a strong market player through its acquisition of DirecTV soon, other peers including Dish and Cogent cries foul and insist on putting concessions on the said deal to maintain net neutrality.
US regulators have been approached by Dish Network Corp. (DISH, Financial), Cogent Communications Holdings Inc. (CCOI, Financial) and other advocacy groups to seek restriction on AT&T’s (T, Financial) takeover of DirecTV (DTV, Financial) keeping in view its increasing power over online video and other content. The said deal worth $48.5 billion is scheduled to close by this June.
The detailed demands-
On May 8, the group of critics had met Federal Communications Commission (FCC) officials to discuss and present the restrictions they are seeking to be put on AT&T regarding its merger with DirecTV. The demands were termed as the most detailed yet with Dish and Cogent were among the major critics during the meeting. While Dish Network Corp. is an American direct-broadcast satellite service provider; Cogent Communications Holdings Inc. is a multinational Internet service provider in the United States. Reviewers at the FCC and the justice department will soon declare a mutually taken decision which is said to put some conditions on the AT&T-DirecTV merger. Dish in particular is concerned about its Sling TV offering.
The panel of critics has demanded the following-
- AT&T to follow the new and stricter so-called net neutrality regulations for the Internet service providers for seven years after the merger.
- AT&T should put all video services in any data caps that it places on customers’ broadband usage. The company should not exempt video content provided by itself and DirecTV.
- Restrictions must be put on AT&T with regards to its business of handling traffic from content companies such as Netflix Inc. (NFLX, Financial) that offers video streaming service.
- AT&T should levy no charges on customers for accepting web traffic.
In short, the demands require AT&T not to force consumers to buy entertainment packages after the merger with DirecTV and offer broadband without any conditions. Public Knowledge, Free Press and New America’s Technology Institute were among the consumer advocacy groups.
The talked about tie-in
Founded in 1983, AT&T Inc. is a Dallas, Texas-based American multinational telecommunications corporation. It is the largest provider of fixed line and the second-largest provider of mobile phone in the United States. It also provides broadband subscription television services. Once merged with DirecTV, one of the largest pay- TV providers in the country will be formed. Companies like Dish, Cogent and other critics in the matter have raised concerns about AT&T’s expansion into a strong player among Internet providers and the competition it will pose for the video streamed on the web.
What next?
There hardly is a possibility of the AT&T-DirecTV deal being rejected by the regulators. However, to what extent the restrictions will be enacted as have been demanded is to watch for. AT&T had shown interest to expand the broadband service accessibility to rural areas that has been considered as quite a competitive step by FCC. The company’s motive is to join its regional U-verse pay TV business with DirecTV’s satellite operations. Let’s stay tuned and keep an eye on whether the merger actually turns into reality.
