AT&T completes DirecTV acquisition; full list of concessions revealed

27 Jul 2015

AT&T Inc has announced that it has completed its long-running acquisition of satellite TV giant DirecTV. The newly combined company, which AT&T claims ranks as ‘the largest pay-TV provider in the US and the world’, will provide services to more than 26 million customers in the US and more than 19 million customers in Latin America and the Caribbean; this figure includes subscribers of Sky Mexico, in which DirecTV holds a minority stake.

Randall Stephenson, AT&T’s chairman and CEO, commented: ‘This transaction allows us to significantly expand our high speed internet service to reach millions more households, which is a perfect complement to our coast-to-coast TV and mobile coverage. We’re now a fundamentally different company with a diversified set of capabilities and businesses that set us apart from the competition’.

As part of the Federal Communications Commission’s (FCC’s) approval of the transaction, AT&T has agreed to the following conditions for the next four years:

• Within four years, AT&T will offer its all-fibre internet access service to at least 12.5 million customer locations, such as residences, home offices and very small businesses. Combined with AT&T’s existing high speed broadband network, at least 25.7 million customer locations will have access to broadband speeds of 45Mbps or above

• Within its wireline footprint, the company will offer 1Gbps service to any eligible school or library requesting E-rate services, pursuant to applicable rules, within the company’s all-fibre footprint

• Within AT&T’s 21-state wireline footprint, it will offer discounted fixed broadband service to low-income households that qualify for the government’s Supplemental Nutrition Assistance Programme. In locations where it’s available, service with speeds of at least 10Mbps will be offered for USD10 per month. Elsewhere, a 5Mbps service will be offered for USD10 per month or, in some locations, 3Mbps service will be offered for USD5 per month

• AT&T’s retail terms and conditions for its fixed broadband internet services will not favour its own online video programming services. AT&T can and will, however, continue to offer discounted integrated bundles of its video and high speed internet services

• AT&T must submit to the FCC new interconnection agreements it enters into with peering networks and on-net customers for the exchange of internet traffic. The company will develop, in conjunction with an independent expert, a methodology for measuring the performance of its Internet traffic exchange and regularly report these metrics to the FCC

• AT&T will appoint a Company Compliance Officer to develop and implement a plan to ensure compliance with these merger conditions. Also, the company will engage an independent, third-party compliance officer to evaluate the plan and its implementation, and submit periodic reports to the FCC.

United States, AT&T, DirecTV Group, Federal Communications Commission (FCC)