March 17, 2015 / 5:30 PM / 5 years ago

AT&T-DirecTV merger escapes heat as all eyes on Comcast

WASHINGTON (Reuters) - AT&T Inc’s proposed acquisition of satellite television company DirecTV is getting a smooth ride from U.S. regulators and industry rivals, who instead are directing their firepower at a merger deal between the nation’s two biggest cable operators.

U.S. Federal Communications Commission filings and interviews with several people familiar with the Justice Department show the $48.5 billion AT&T-DirecTV deal is getting far less attention than Comcast Corp’s agreement to buy Time Warner Cable Inc for $45 billion.

At the core is how Comcast’s deal would bolster the company’s already dominant position in broadband Internet, an important growth area as more Americans drop cable subscriptions to watch video on the Web.

Each merger would create a company controlling more than a quarter of the pay TV market. But it is the Comcast deal that has triggered FCC and Justice Department inquiries resulting in hours-long depositions, hundreds of meetings and nearly 90,000 comments, according to disclosures and people who have met with the regulators.

Muted opposition does not necessarily guarantee a painless regulatory process for AT&T and DirecTV, but it does reduce pressure on regulators, whose bar is high for rejecting a merger, antitrust and FCC experts say.


With Time Warner Cable, Comcast would provide high-speed Internet access to almost 40 percent of Americans, according to SNL Kagan data.

Critics at advocacy groups and telecom, media and Web companies say they fear Comcast would gain unparalleled control over how content providers reach millions of pay-TV subscribers, as well as consumers’ access to video delivered by competitors over the Internet.

By contrast, AT&T covers about 17 percent of the broadband market, and DirecTV does not offer Internet access.

“The customers aren’t anxious, and the competitors aren’t rattled,” said former FCC Chairman Reed Hundt, now at law firm Covington & Burling. “The FCC or the Justice Department will be looking for markets where this will have an impact, and hardly anyone is telling them that there are such markets.”

The FCC, which determines if deals are in the public interest, has received nearly 20 petitions to deny Comcast’s proposed purchase of Time Warner Cable, but only five such petitions for AT&T-DirecTV, a review of disclosures shows.

The FCC has received about 14,000 “brief comments” on the AT&T deal, many from members of the public concerned about the merger, according to a Reuters tally. On Comcast-Time Warner Cable, the agency has gotten about 88,000 such comments.

FCC disclosures show officials there have held more than 300 meetings with supporters and opponents of Comcast’s proposed merger, compared with about 70 for AT&T-DirecTV.

A critic of the AT&T-DirecTV deal who met with the Justice Department said reviewers there asked “few questions” and gave “blank stares.”

The signage for an AT&T store is seen in New York October 29, 2014. REUTERS/Shannon Stapleton

The Justice Department, which looks at antitrust issues, and the FCC declined to comment for this story.

A Comcast spokeswoman declined to comment on comparisons with AT&T’s merger. But she said merging with Time Warner Cable would not cause consumers to lose any video, broadband or phone choices as the two companies do not directly compete in any market.

An AT&T spokesman said the DirecTV acquisition received support from “labor, rural interests, the tech community, and many others eager for an alternative to cable.”

Additional reporting by Liana B. Baker and Malathi Nayak in New York, Editing by Soyoung Kim, Lisa Von Ahn and Kevin Drawbaugh

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