FCC Releases AT&T/DirecTV Order

Rosenworcel says FCC should vet program carriage issues
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The FCC Tuesday released the order approving the over-400-page AT&T/DirecTV deal, which said that the conditions imposed to make the deal palatable to regulators were all transaction-specific and included preventing harms and confirming benefits.

The order says the record in the merger review supports AT&T's and DirecTV's claim that the combined company will be a more effective MVPD competitor, providing greater choice and lower prices given that complimentary assets are being combined.

In a Jack Sprat-like analysis, the order points out that DirecTV has 20 million video subs, but lacks broadband, while AT&T has plenty of broadband, but fewer than 6 million video subs, hampered by the high cost of programming.

"We find that the combined AT&T-DIRECTV will increase competition for bundles of video and broadband, which, in turn, will stimulate lower prices, not only for the Applicants’ bundles, but also for competitors’ bundled products – benefiting consumers and serving the public interest," the order concluded, though that comes at the price of buildout and interconnection and access to over-the-top and broadband usage plan conditions that decision critics, including Commission Republicans, have called excessive and unnecessary.

“[T]he transaction also creates the potential for competitive harms, which we impose conditions to address,” the order says.

In her statement on the order, Commissioner Jessica Rosenworcel called on the FCC to look into the issue of access to programming outlets, making the point that important issue was not the subject of any conditions in the deal—as some, including the American Cable Association—had pushed for.

"The issue of independent programming and the complexities of securing access on traditional video distribution platforms has come up repeatedly in the record in this proceeding," she pointed out. "I think this issue is ripe for examination, and hope that the Commission can find another forum for discussion of this important topic."

Commissioner Mignon Clyburn has also called for the FCC to launch an inquiry into program access and carriage issues.

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