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AT&T swallows DirecTV in $50 BEELLION biz gulp – moments after FCC OK

Hungry telco goliath couldn't wait to polish off telly snack

The FCC has formally approved AT&T's acquisition of satellite TV giant DirecTV, clearing the way for the nearly $50bn deal to go through.

On Friday, the US watchdog backed the $48.5bn buyout plan two days after chairman Tom Wheeler announced he would put the proposal up for approval. The deal was waved through with commissioners Wheeler, Mignon Clyburn and Jessica Rosenworcel all in favor, Michael O'Rielly concurring in part, and Ajit Pai dissenting in part.

Approval from the Federal Communications Commission will pave the way for the merger between AT&T and DirecTV to proceed. Earlier this week, the US Department of Justice gave a thumbs up, provided AT&T meets the FCC's conditions.

Those conditions, as laid out today by the regulator, are:

  • AT&T must expand its fiber internet service to cover a total of 12.5 million homes in the US over the coming years to help increase the availability of "over the top" broadband TV services as an alternative to the AT&T/DirecTV monolith.
  • The expanded fiber service will also be required to offer gigabit internet service to schools and libraries in the newly-covered parts of the country. The service will be covered under the government's e-rate program.
  • AT&T will be required to offer discounted broadband service for low-income households in all of its coverage areas.
  • There will be a non-discrimination provision that forbids AT&T from exempting its own services and affiliated services from counting against customer data caps on broadband connections. The carrier will have to treat all streaming services equally when it comes to data caps.
  • There will be interconnection transparency rules that require AT&T to tell the FCC about all of its interconnect deals and explain how it is partnering with backbone providers and streaming video services to connect their lines directly with AT&T's relay centers.
  • AT&T will be forced to meet with an external monitor to make sure all of the previous conditions are being met.

Shortly after the FCC issued its approval, AT&T declared that the deal was completed.

"We'll now be able to meet consumers' future entertainment preferences, whether they want traditional TV service with premier programming, their favorite content on a mobile device, or video streamed over the Internet to any screen," AT&T CEO Randall Stephenson said.

Next up on the merger agenda: Charter Communications' $78.7bn tie-up with Time Warner Cable. ®

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