FCC leaning towards approving AT&T/DirecTV gobble – report

Regulators said to be OK with $49bn merger, though restrictions may apply


The Federal Communications Commission is reportedly ready to approve US telecom giant AT&T's proposed $49bn acquisition of DirecTV, despite concerns voiced by Netflix and other online media outfits.

The FCC is nearly finished with its review and will likely sign off on the deal, the Wall Street Journal reports, citing the fabled "sources familiar with the matter."

The report states that regulators don't have the same sort of worries over AT&T's proposed deal as they did over Comcast's ill-fated attempt to gobble Time Warner Cable.

AT&T would stand to become the largest television provider in the US through the combination of DirecTV satellite subscribers and customers of its own U-Verse TV and internet service. But regulators are more concerned about antitrust issues in broadband internet access than in TV, and DirecTV doesn't have a broadband offering of its own.

If the WSJ's sources are right, the FCC's approval would come around one year since AT&T first announced its intent to acquire the satellite TV provider.

The $49bn deal has faced resistance from companies including Netflix, which has voiced concerns that the deal in its current form would allow AT&T to charge online video providers higher rates to reach its massive customer base.

Such worries were enough to sink the proposed Comcast/Time Warner Cable merger, but apparently have not swayed the FCC's review of AT&T's plans. The report does note, however, that additional conditions could be placed on the deal before approval is granted.

The WSJ report goes on to suggest that AT&T's promise to extend its rural broadband services may have helped reassure the FCC – although the telco has promised to expand its reach before, only to renege when it didn't like the way the regulatory winds were blowing. ®

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