AT&T to buy DirecTV for $48.5 billion
AT&T clearly isn't taking Comcast's recent acquisition efforts lying down; it just announced plans to buy DirecTV in a deal worth about $48.5 billion. The communications giant sees a takeover as an opportunity to expand how it delivers video beyond just the bundles it has today. If officials approve the merger, AT&T could send conventional and internet-based video to virtually any place you happen to be, whether it's on your phone or in mid-flight. This also represents a content grab -- DirecTV has the exclusive rights to NFL Sunday Ticket and other premium programming, so there's a chance that much of its content could reach U-verse and other AT&T offerings.
The telecom is making a lot of promises to assuage regulators that will no doubt look at the proposed mega-buyout very closely -- AT&T clearly wants to avoid a repeat of its failed attempt to buy T-Mobile in 2011. It hopes to bring high-speed internet access to 15 million additional customers, primarily in rural areas where a mix of fixed wireless and fiber-to-the-home could get people online. It's also guaranteeing internet-only service plans fast enough for online video ("at least" 6Mbps) for the next three years, and it will honor the FCC's 2010 net neutrality rules (which typically prevent blocking or throttling internet services) for that same period of time. DirecTV's stand-alone packages would be available at consistent prices nationwide during this stretch, too.
The move won't affect AT&T's plans to bid in the FCC's upcoming wireless spectrum auction, and it estimates that the purchase will start adding value within about a year of closing. Whether or not it closes is another matter. The US government already has concerns about the possible anti-competitive effects of Comcast's proposed buyout of Time Warner Cable; it's likely that the feds will take a similar approach to AT&T and DirecTV. If Comcast runs into regulatory trouble, it won't be surprising if AT&T ends up in the same boat.
