Netflix wipes blood of Comcast/TWC from its blade, charges toward AT&T/DirecTV

Streaming giant wants changes to proposed mega-merger

Netflix is lobbying US watchdog the FCC to reject the proposed merger between AT&T and DirecTV.

The over-the-top vid streamer said that should AT&T be allowed to scoop DirecTV for $49bn, the resulting broadcast behemoth would be able to throw its weight around and extract premium fees from streaming upstarts like Netflix.

To express its displeasure with the would-be merger, Netflix met FCC officials on Monday, and sent a letter outlining its problems with the deal as it stands.

"AT&T would become the nation’s largest multichannel video programming distributor. After AT&T’s projected broadband investments, it could become the largest ISP as well," Netflix wrote.

"These two dynamics create a powerful incentive for AT&T to protect its investment in DirecTV’s bundled programming by using its ability to harm online video distributors (OVDs) to prevent or delay cord-cutting and cordshaving."

Announced last year, the case has been held in limbo by the FCC since March so the commission can take a closer look.

Similar issues were cited by Netflix when it pushed against the ill-fated Comcast/Time Warner Cable deal. That merger was called off by Comcast when it became unlikely the FCC would agree to let it go through due to concerns the combined companies would create an antitrust nightmare.

"The applicants also attempt to distinguish themselves from Comcast by noting that they are not vertically integrated with a significant video programmer," Netflix told the FCC in its latest letter.

"This is beside the point. AT&T’s investment in a business model that profits by selling bundled programming packages will result in a powerful incentive to protect that model.

A Netflix spokesperson told El Reg that, contrary to popular belief, it is simply "concerned" with the deal, and is not dead-set on seeing it killed off. "While we are participating in the government's review, we are not opposing the merger," the company said in a statement.

"We've been highlighting concerns about AT&T's broadband practices and the need for appropriate remedies since last September." ®


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