Klobuchar, Lee Air AT&T/DirecTV Deal Concerns With DOJ, FCC
Two senators urged antitrust regulators to examine AT&T’s proposed acquisition of DirecTV with great care. Senate Judiciary Antitrust Subcommittee Chairwoman Amy Klobuchar, D-Minn., and ranking member Mike Lee, R-Utah, sent a joint letter to FCC Chairman Tom Wheeler and Attorney…
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General Eric Holder Oct. 30. “Your agencies should consider the extent to which the merger is necessary to provide bundled service, and whether the merger will improve the companies’ ability to offer service that can more strongly compete with cable,” they said. “We think you should examine whether AT&T’s commitment to offer standalone [broadband] service for three years is sufficient to secure customers’ continued ability to choose that option.” They cited concerns about most favored nation clauses and about how they “can negatively affect competition for independent programming.” They also urged the regulators to examine any program access issues. The tone “suggests conditions, not rejection,” said Guggenheim Partners analyst Paul Gallant in a Tuesday research note to investors. “Given the current dispute over outside parties’ access to the merging companies’ programming contracts, we are inclined to think a March 2015 ruling from the DOJ and FCC is realistic.” Gallant suggested Comcast’s proposed acquisition of Time Warner Cable is the more challenging deal to secure approval. AT&T and DirecTV have defended their deal as strongly pro-consumer and necessary to provide better bundles.