What You Need To Know About A Potential AT&T Purchase Of DirecTV
By Perry Michael Simon on May 13, 2014
First, the tl;dr summary: AT&T is reported to be closer to buying satellite television provider DirecTV for $50 billion. It’s more media ownership consolidation. Consolidation isn’t usually advantageous for consumers, for lots of reasons. But this deal may not matter in the long run.
Now, the long, I’ve Got All Day version: Do we need fewer options for television? The Internet? Communication? No? Then consider whether it’s going to be good for AT&T to buy DirecTV. Consider that it could happen within two weeks. (Or not. After all, the rumors have been around for weeks.) And consider that DirecTV has about 50 billion reasons to sell.
Here’s why AT&T wants DirecTV: It’s an instant expansion of its television offerings without the need to lay more fiber and expand its U-Verse system. It gives them a lot of new subscribers and makes the combined DirecTV-U-Verse a player against the merged Comcast-Time Warner systems. It gives them a national video footprint that U-Verse doesn’t have. It’s a middle finger to Verizon, instantly vaulting AT&T’s video options past Verizon’s FiOS (at least in reach) to pair with wireless. And then there’s DirecTV’s Latin America operations, which would give them a nice footprint in that region more than the minority interest in a competitor they hold today.
Here’s why consumers may not want it: In U-Verse territory, it’s one less competitor to use to negotiate better rates (“Give me a better deal or I’m switching to DirecTV”). It will likely mean U-Verse — and AT&T fiber — won’t grow much past where it already is, because why bother when you have a satellite footprint that covers the nation? It’s not going to lower prices, although you can expect “Triple Play!” packaging with cell phone service, video, and Internet. (How they’ll do Internet depends on where you are — fiber if you’re in U-Verse territory, DSL or third-party cable if not.) And whether you benefit or not depends on how much you like bundles. You might LIKE the convenience of one bill for all your communications needs, even if competition would have lowered prices in the long run. But if you’re not a fan of AT&T service, the prospect of them taking over DirecTV might not be a happy one.
Here’s why it might not matter: First, the plan, according to the rumors, is that AT&T would maintain DirecTV as a separate unit. Second, there IS competition — unless you HAVE to have DirecTV’s exclusive NFL Sunday Ticket (and, personally, as a football fan, I’m happy enough with the Red Zone channel I get on FiOS, but, then, the Eagles tend to be on national TV a lot when they’re good), you can always switch to Dish Network or your local cable system or FiOS, if you can get it. Or nothing. Because, let’s face it, is video over satellite the long-term play or is video over IP the way to go? More people are cutting the cord, and if Aereo wins its court case and they come to your area, you’d be able to get your local broadcast channels over IP as well. (If you get decent reception of the locals with an antenna, that’s even easier, and free.) In a market fast moving towards video over the Internet, a la carte programming, and alternate ways to get the content like Netflix or Hulu or Amazon or your friend’s HBO Go subscription or (illicit means of obtaining programming redacted), strapping a dish to your roof or window sill to get TV might be an anachronism before long.
Here’s the chance it’ll happen: If the Comcast/Time Warner merger gets approved, this will get approved. If Comcast/Time Warner gets bounced, this still might get approved, because it doesn’t involve adding Internet concentration and AT&T’s U-Verse penetration doesn’t add up to too much power when combined with DirecTV. Either way, if the deal gets announced, it’s hard to imagine the regulators saying no.
But, again, does it matter when so many of you are cutting the cord? The Comcast/Time Warner deal is more troublesome because it involves being, basically, a national Internet carrier which can, if Net neutrality doesn’t get preserved, control the pipes to most Americans. This one doesn’t really impact that much. And as long as you have Net access, you can get a lot of what you want on your computer, your tablet, and your Roku or Apple TV or Chromecast.
So, does this deal worry you, or are you already cutting the cord? If you HAVE cut the cord, how are you doing it, and what do you miss? Comment below.