Fresh Off Its Merger, AT&T Jacks Up Price Of Streaming Video Service

from the history-repeats-itself dept

It didn't take long for AT&T's promises of merger synergies to magically evaporate. During the company's sales pitch for its $86 billion acquisition of Time Warner, AT&T repeatedly stated how the merger would result in all manner of "synergies" and savings that would be passed on to the consumer. In reality, the massive debt load acquired in the wake of the deal has AT&T doing everything in its power to try and trim its M&A-bloated balance sheet... to the immediate detriment of the company's customers.

Last week we noted how AT&T had begun flexing its muscles in the wake of a Judge's comically-myopic ruling in the Time Warner case. First, AT&T raised the price of some of its "unlimited" data plans, then axed a deal that provided HBO for free to some wireless customers. Then the company set to work raising a misleading, nonsensical and unnecessary "administrative fee" from $0.76 to $1.99, effectively providing AT&T with roughly $800 million in additional revenue every year. Such garbage fees are routinely used to help broadband providers falsely advertise a lower rate.

Not to be outdone, AT&T is also now informing the company's DirecTV Now streaming video customers that they can look forward to a new $5 price hike starting in August. The hike is necessary, AT&T claims, in order to bring "the cost of this service in line with the market":

"In the 18 months since our launch, we have continued to evolve our DIRECTV NOW products to serve this new customer set and compare favorably with our competitors. To continue delivering the best possible streaming experience for both new and existing customers, we’re bringing the cost of this service in line with the market—which starts at a $40 price point."

You're to forget, apparently, that one of AT&T's core selling points during the merger approval process was that owning "must have" content like HBO was going to make it easier for AT&T to provide users cheaper, better TV service. From an AT&T brief (pdf) filed at the tail end of arguments during company's recent merger skirmish with the DOJ:

"The evidence overwhelmingly showed that this merger is likely to enhance competition substantially, because it will enable the merged company to reduce prices, offer innovative video products, and compete more effectively against the increasingly powerful, vertically integrated 'FAANG' [Facebook, Apple, Amazon, Netflix, and Google] companies."

Yeah, or, you know, not. AT&T also forgot, apparently, that the whole reason users cut the cord and head to streaming services in the first place is because they're tired of often bi-annual rate hikes on traditional TV service (Dish Network's Sling TV is also issuing a $5 price hike to its own Sling TV service in perfect symmetry).

Again, none of this is new. Time and time again, Americans are promised a world of synergies and savings that can only be provided if already-massive companies are allowed to grow even larger without much oversight. And time and time again, we quickly learn that the lion's share of those promises are horse shit. We then fail utterly to actually learn anything from the experience. Meanwhile, with net neutrality on the chopping block, you can be damn sure that sneaky fees and vanilla price hikes are going to be the least of our problems in the face of a reconstituted Ma Bell.

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Filed Under: directv, prices, streaming video, synergies

Companies: at&t, directv