Why the Government Is About to Approve the AT&T And DirecTV Mega-deal — And the One Thing That Remains a Big Concern
2015-06-25 21:00:37.140 GMT
By Cecilia Kang
June 25 (Washington Post) -- A decision on AT&T's merger
with DirecTV is expected any day now, and suddenly federal
officials are being swarmed with visits and calls by the
companies who are arguing over details of the conditions attached
to any approval.
That's actually a good sign for the merger's chances. To
understand why, it's useful to compare how regulators are
approaching this deal to Comcast's failed attempt to buy Time
Warner Cable, which was rejected in April.
Throughout the Justice Department and FCC's review of
Comcast and Time Warner Cable, government officials were
convinced that the deal would harm competition so the companies
didn't even get a chance to talk about conditions in depth.
Federal officials eventually made it clear that nothing could
make them change their minds, according to regulators.
But public filings show that top AT&T and DirecTV executives
have met with antitrust officials and commissioners at the
Federal Communications Commission to answer a slew of
last-minute, detailed questions in recent weeks -- a major sign
that regulators are likely to approve the $45 billion merger that
would create a mobile video powerhouse.
* Earlier this week the companies elaborated on plans to deploy
their top-speed Internet service to an additional 2 million
homes -- a promise made to sweeten their merger pitch.
* They discussed AT&T's pricing schemes for wireless data, and
how the merger would affect consumers' wireless bills.
* In several calls and meetings, they replied to questions
about so-called "interconnection fees" -- the money a company
such as Netflix is paying AT&T to make sure its streaming
videos move across the backbone of AT&T's networks in a
high-quality manner.
In meetings with the FCC's top antitrust official, Jonathan
Sallet, company executives including AT&T's top regulatory and
legal officials, Wayne Watts and Robert Quinn, reiterated their
pitch for "voluntary commitments...which will provide the
Commission with further assurance that the transaction will serve
the public interest and deliver benefits to consumers," one of
the filings say.
Of course the FCC and Justice Department could still reject
the deal, especially given the controversy over interconnection
fees. Officials are trying to determine if high-speed Internet
providers could unfairly thwart competition from online video
providers by forcing them to pay extra fees to ensure their
videos reach households without annoying interruptions. Allowing
such fees could let AT&T or other broadband providers determine
what Web content will be the most popular among consumers.
Complaints by Netflix, Level 3 and Cogent over
interconnection fees charged by Comcast and Time Warner Cable
helped convince the government to reject that deal, several
officials have said on the condition of anonymity because the
reviews are private.
This is no small matter. On May 14, AT&T chief executive
Randall Stephenson on May 14 talked by phone with FCC Chairman
Tom Wheeler to discuss "peering and interconnection issues"
raised by companies including Cogent and Netflix, according to
one filing -- an indication that this issue is on the minds
of top executives at AT&T.
-0- Jun/25/2015 21:00 GMT
2015-06-25 21:00:37.140 GMT
By Cecilia Kang
June 25 (Washington Post) -- A decision on AT&T's merger
with DirecTV is expected any day now, and suddenly federal
officials are being swarmed with visits and calls by the
companies who are arguing over details of the conditions attached
to any approval.
That's actually a good sign for the merger's chances. To
understand why, it's useful to compare how regulators are
approaching this deal to Comcast's failed attempt to buy Time
Warner Cable, which was rejected in April.
Throughout the Justice Department and FCC's review of
Comcast and Time Warner Cable, government officials were
convinced that the deal would harm competition so the companies
didn't even get a chance to talk about conditions in depth.
Federal officials eventually made it clear that nothing could
make them change their minds, according to regulators.
But public filings show that top AT&T and DirecTV executives
have met with antitrust officials and commissioners at the
Federal Communications Commission to answer a slew of
last-minute, detailed questions in recent weeks -- a major sign
that regulators are likely to approve the $45 billion merger that
would create a mobile video powerhouse.
* Earlier this week the companies elaborated on plans to deploy
their top-speed Internet service to an additional 2 million
homes -- a promise made to sweeten their merger pitch.
* They discussed AT&T's pricing schemes for wireless data, and
how the merger would affect consumers' wireless bills.
* In several calls and meetings, they replied to questions
about so-called "interconnection fees" -- the money a company
such as Netflix is paying AT&T to make sure its streaming
videos move across the backbone of AT&T's networks in a
high-quality manner.
In meetings with the FCC's top antitrust official, Jonathan
Sallet, company executives including AT&T's top regulatory and
legal officials, Wayne Watts and Robert Quinn, reiterated their
pitch for "voluntary commitments...which will provide the
Commission with further assurance that the transaction will serve
the public interest and deliver benefits to consumers," one of
the filings say.
Of course the FCC and Justice Department could still reject
the deal, especially given the controversy over interconnection
fees. Officials are trying to determine if high-speed Internet
providers could unfairly thwart competition from online video
providers by forcing them to pay extra fees to ensure their
videos reach households without annoying interruptions. Allowing
such fees could let AT&T or other broadband providers determine
what Web content will be the most popular among consumers.
Complaints by Netflix, Level 3 and Cogent over
interconnection fees charged by Comcast and Time Warner Cable
helped convince the government to reject that deal, several
officials have said on the condition of anonymity because the
reviews are private.
This is no small matter. On May 14, AT&T chief executive
Randall Stephenson on May 14 talked by phone with FCC Chairman
Tom Wheeler to discuss "peering and interconnection issues"
raised by companies including Cogent and Netflix, according to
one filing -- an indication that this issue is on the minds
of top executives at AT&T.
-0- Jun/25/2015 21:00 GMT