AT&T Deal with DirecTV Unlike Other Mergers: CEO Tells Lawmakers

AT&T Inc’s T.N intended partnership with DirecTV has no comparison with other deals redefining the telecommunication industry because the firms in question provide a significantly distinct set of services, AT&T chief executive told lawmakers today.

“This is not Comcast/Time Warner, this is not two cable companies getting together, this is not Sprint and T-Mobile,” CEO Randall Stephenson is quoted by Reuters as saying about the proposed merger worth $48.5 billion at hearing before a House Judiciary Committee.

“We’re putting (DirecTV’s satellite) TV product with our broadband wireless product. … There is not a content player per se in this transaction,” he added.

The deal will also be considered during a hearing by a Senate Judiciary Committee panel. Several similar deals, which have the potential to shake up the cable and wireless market, have also been proposed. One of the other deals is Comcast’s $45.2 billion overture for Time Warner Cable. Sprint is considering proposing to acquire T-Mobile.

Consumer activists have sounded the alarm bells about consolidating the industry, cautioning that such deals may bring about higher prices for consumers and content providers despite the companies involved issuing assurances to the contrary.

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John Bergmayer of Public Knowledge, a non-profit advocacy organization in Washington, said that the issue was not only about content services having excessive influence but also that the mergers might give content distributors too much power that they might be able to dictate the programming market.

Stephenson and DirecTV CEO Michael White reaffirmed their position before the Federal Communications Commission earlier this month that deal would bring together complementary products from the two companies to address increasing consumer demand for video and broadband internet connectivity.

According to the New York Times, Bergmayer added that the proposed deal failed the antitrust test, raised many questions and was not in the best interests of the public.

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To contact the reporter of this story; Yashu Gola at yashu@forexminute.com