Please, Mister Regulator Man, let’s not let the AT&T and DirectTV deal happen. I hever want to buy my TV service from the phone company.
This proposed $50 billion merger of these two communications and media conglomerates will create a company with too much power over the consumer. Especially consumers who watch football. It will not be good for innovation or choice.
The gravitation toward monopolies is omnipresent, despite the government’s ongoing battle to stop them. In 1982, through a federal consent decree, the Bell System monopoly was broken up and we got many “Baby Bells” which became known as “RBOCS” (Regional Bell Operating Companies).
The breakup of the Bells coincided nicely with the advent of cable television. And then you had the Internet, and broadband, and now “over-the-top” TV services. We enjoyed a couple decades of the golden age of consumer communications choice.
That appears to be shifting. The mega-mergers are back, and your choice for broadband and TV is being consolidated.
The problem can be illustrated with my own “phone” bill, in which the Raynovich family pays the man for an ever-increasing menu of digital media and phone services. My money goes to CenturyLink (which bought Qwest), but that includes a DirectTV bundle. With CenturyLink and DirectTV together in one discounted, bundled bill, I get phone, broadband, and satellite pay TV.
As a consumer, I have to ask what happens to that when AT&T acquires DirectTV? I imagine my TV bill will go up and my customer service and choices will go down.
Certainly, at the minimum, I will lose a bundling discount, because why would AT&T give that money to CenturyLink? But worse than that, I will lose choice. I have only one real broadband option where I live. In theory, for TV, I could switch to DISH. But do you know anybody that switches to DISH?
This is just a small, selfish case, of course. But it shows you the regulatory challenges that this deal will have. We are heading toward a huge communications-media monopoly, and it’s going to screw the consumer in the end. The world of broadband and pay TV choice is quickly diminishing.
As of last year, AT&T already owned nearly 50% of the broadband market among telecommunications providers. Comcast owned about 40% of the cable broadband market. Oh, but wait, Comcast is looking to close a deal to buy Time Warner — which is suspiciously close to the size of the AT&T/DirecTV deal — combining the two largest cable companies in the world. That would give the combined entity close to 70% of all cable broadband subscribers in North America, according to Leichtman Research.
Clearly it’s now a race between Comcast and AT&T to become the largest provider of consumer’s communications-media embilical cord.
Just look at some more of these numbers. In addition to having close to 50% broadband penetration among telecommunications providers, AT&T also owns its own broadband pay TV service, U-Verse’s TV, which has about 6 million customers. DirecTV has 20 million customers and is the second-largest pay-TV provider behind Comcast. It is the largest satellite TV company, and it also has 18 million customers in Latin America.
Former AT&T CEO Michael Armstrong was way ahead of his time.
For a consumer perspective, this would be fine if I thought I was going to get something out of the deal. But what do you expect: Better customer service? More innovation? Lower prices?Those are about as likely as the Cleveland Browns winning the Super Bowl, with Johnny Manziel coming over to my house for dinner to tell me how wrong I was.
Good luck, AT&T. Good luck Johnny.
If the regulators allow this to pass, we’re one step closer back to the world of Ma Bell, in which one provider owns your telecom service — as well as your broadband and TV service, as well.
AT&T Buys DirecTV for $48.5 Billion (USA Today)
AT&T Makes Bet on Video with DirecTV Bid (Reuters)