Just days after FCC Chairman Tom Wheeler circulated a draft order to approve AT&T’s acquisition of DirecTV, the full commission on Friday approved the order and AT&T and DirecTV completed the deal. As expected, the commission is imposing several conditions on the merger, including a requirement to bring fiber-to-the-premises to 12.5 million customer locations that were not previously part of the carrier’s FTTP deployment plans.
AT&T/ DirecTV also will be required to make low-price stand-alone broadband service available to low-income consumers in its broadband service area and will be required to offer gigabit service to any E-rate eligible schools or libraries in areas where it deploys FTTP. In a press release, AT&T said its low-income service will provide speeds of at least 10 Mbps at $10 a month where available. Where 10 Mbps service is not available, low-income households will get 5 Mbps service for $10 monthly or 3 Mbps service for $5 a month.
AT&T/ DirecTV Deal Approval
As Wheeler previously outlined, the order also calls for AT&T/ DirecTV to submit its interconnection agreements to the FCC so that the commission can monitor the terms of those agreements. According to an FCC press release announcing the deal approval, the commission’s goal in reviewing interconnection agreements is to “determine whether AT&T/ DirecTV is denying or impeding access to its networks in anti-competitive ways through the terms of those agreements.”
Also as previously outlined, the FCC will prohibit AT&T/ DirecTV from imposing discriminatory usage-based allowances or other discriminatory retail terms and conditions on its broadband service that might favor its own video services. Additionally the carrier will be required to have an internal and an external compliance officer to help ensure that the company complies with merger conditions.
Although some early reports about AT&T/ DirecTV merger conditions said the carrier would be required to increase its broadband deployments to rural areas, no such condition was mentioned in Friday’s press release. When Wheeler announced the proposal for a 12.5 million-location FTTP requirement, he referenced metro areas as expected recipients of FTTP service. The FCC may have taken the position that the carrier would have sufficient motivation to deploy broadband (albeit not necessarily FTTP) to rural locations through the Connect America Fund, which offers to pay some of the carrier’s rural deployment costs.
In the AT&T press release, AT&T CEO Randall Stephenson said the merged company is “all about giving customers more choices for great video entertainment integrated with mobile and high-speed Internet service.” He also noted that “We’re now a fundamentally different company with a diversified set of capabilities and businesses that set us apart from the competition.”
AT&T noted that by the end of this year, it expects its largest revenue streams to be, in descending order: wired and wireline business services, entertainment & Internet, consumer mobility and international mobility and video.