Lastly, AT&T argued that the FCC has no authority to order the company to inform its customers that it violated the Transparency Rule in not telling them about speed changes when throttling data because the statement would both be untrue and a violation of AT&T’s First Amendment rights. Regular readers know AT&T’s been waging a not-so-subtle war on these grandfathered users ever since it got rid of unlimited data plans. A methodology to measure the Internet traffic exchange performance will be developed by AT&T along with an independent expert.
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Most importantly, AT&t will no longer challenge the Net Neutrality laws recently adopted by the FCC.
“These conditions are the forced tribute that the company must offer to mollify the Capitol”, GOP Commissioner Ajit Pai said, referencing The Hunger Games. And some analysts see the AT&T-DirecTV merger as a reason for Verizon to pursue Dish Network, the country’s number-two satellite-TV company. At a time when fierce competition over cellular phone service is shrinking profit margins, the acquisition may also help AT&T diversify the types of content it serves over its mobile network, which increasingly supports non-voice services such as connected cars. Will it protect the consumers like the FCC says or will it make it even more costly to find great Internet service?
The requirements from the FCC, which ensures that deals are in the public interest, include protections for rival video and pledges to expand high-speed Internet services to schools, low-income Americans and other customers. “Those customers were repeatedly advised of AT&T’s congestion management practices, and, for almost four years, they chose to keep their service”, AT&T said. AT&T is also buying something else in the deal: a court case from the Federal Trade Commission. In its Q&A fact sheet for customers, the company says it will offer broadband discounts to DirecTV customers in the 21 states where it offers service “in the coming weeks”.
“By charging higher prices for its RSNs to its pay-TV rivals, the new AT&T-DirecTV will not only drive up its rivals’ customers’ subscription fees, but it will reduce their funds available for deploying high-performance broadband services in new areas”, ACA President and CEO Matthew Polka said in a news release.
With the completion of the deal, AT&T expects to derive a massive $2.5 billion worth of cost synergies on an annualized basis from the third year.
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According to a Bloomberg report, the acquisition, valued at $49B, is expected to create a powerful tandem that will set the bar for broadband and video streaming services in the U.S.
