AT&T: We Can Only Compete With Mega-Comcast By Eating DirecTV AT&T executives must be loving Comcast right now, as the scrutiny of Comcast's $45 billion attempt to acquire Time Warner Cable has obscured AT&T's own attempt $48.5 billion effort to acquire DirecTV. In many ways one could argue the AT&T deal is worse in that it eliminates a company that has been a rather disruptive competitor in the pay TV market, and replaces it with a company that has a legacy of avoiding real competition by any means necessary. Still, while DirecTV users aren't thrilled, the general public appears to be paying much more attention to Comcast's deal, allowing AT&T to fly under the radar. Case in point: while everyone was focused on Comcast's filing supporting their deal yesterday, AT&T submitted their own filing with the FCC. It mirrors Comcast's argument in claiming that the TV and broadband market is just so competitive right now, there's simply no way a larger AT&T could behave badly. AT&T goes so far as to use the Comcast deal as an example of why regulators should approve the deal: quote: The combined AT&T and DIRECTV will be able to offer new and better service bundles,creating a stronger competitor to the cable bundle. Cable has long been the dominant provider of broadband and video services in the United States, and if the Comcast/Time Warner Cable/Charter transactions are completed, that dominance will swell even further. By uniting AT&T’s wireline and wireless broadband infrastructure and DIRECTV’s nationwide video service under common ownership, the combined company will be able to bundle broadband and video (as well as wireless) services in ways that it could not without the transaction. And it will do so in many areas where cable incumbents are currently the only bundled service providers. AT&T fails to mention that they're quote: Put differently, econometric analysis confirms that, even before efficiencies are considered, the combination of AT&T and DIRECTV will create a pro-competitive, integrated bundle of video and broadband services that provokes a beneficial competitive reaction from cable and results in a demonstrable overall net benefit to consumers. The problem with that scenario is that no matter how much AT&T wishes it to be so, LTE service really isn't a real competitor for Comcast cable services because it's simply too expensive in the age of HD Netflix streaming. AT&T hopes to migrate users from unlimited, not-profitable-enough DSL lines to pricey LTE connections and, as with any giant company, truly competing with anybody and reducing revenues really isn't high on the action item list at most executive meetings. Meanwhile, both AT&T and Comcast would face one less competitor on the pay TV front. AT&T fails to mention that they're refusing to upgrade many of their existing DSL users , thereby consciously helping to create a stronger Comcast monopoly in countless markets. Indeed, AT&T doesn't really care so much about improving competition as they hope to take advantage of less competition ever before by pushing their old DSL users onto more expensive, capped LTE plans . DSL users suddenly paying more than ever for broadband will somehow lead to a new generation of competition:The problem with that scenario is that no matter how much AT&T wishes it to be so, LTE service really isn't a real competitor for Comcast cable services because it's simply too expensive in the age of HD Netflix streaming. AT&T hopes to migrate users from unlimited, not-profitable-enough DSL lines to pricey LTE connections and, as with any giant company, truly competing with anybody and reducing revenues really isn't high on the action item list at most executive meetings. Meanwhile, both AT&T and Comcast would face one less competitor on the pay TV front. That's the argument in a counter filing by Public Knowledge, which argues that the elimination of a pay TV competitor like DirecTV really can't be made up for: quote: On its face, a merger that results in the loss of a pay TV competitor in more than sixty markets is contrary to the public interest. Loss of competition leads to higher prices, worse service, and a loss of diversity of content. Additionally, if AT&T, a national wireless and regional wireline broadband provider becomes a larger player in the pay TV market, its incentive to discriminate against online video services would increase. The FCC must block this transaction if it cannot be assured that it can alleviate these harms. To help ease regulatory fears AT&T is making many of the same empty promises Comcast is -- first and foremost being that they'll promise to adhere to defunct net neutrality rules. Unmentioned is that AT&T helped write those rules intentionally so they would contain numerous loopholes and wouldn't cover wireless networks. AT&T's also promising to somehow expand broadband coverage significantly, but as we've noticed that's a claim that usually gets To help ease regulatory fears AT&T is making many of the same empty promises Comcast is -- first and foremost being that they'll promise to adhere to defunct net neutrality rules. Unmentioned is that AT&T helped write those rules intentionally so they would contain numerous loopholes and wouldn't cover wireless networks. AT&T's also promising to somehow expand broadband coverage significantly, but as we've noticed that's a claim that usually gets trotted out every time the company wants regulatory approval for something , then quickly forgotten after the deal gets approved. Public Knowledge argues there's really nothing about this deal that's good for consumers, and eliminating DirecTV from Comcast and AT&T's competitive radar will likely only act to drive up prices for everyone. Exhibit A







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